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Gold’s Unexpected Reversal Opens Up Downside Risks in the Short Term

ByJason Sen
Published 07/24/2025, 05:38 AM
Gold Spot US Dollar
0.04%
Silver Spot US Dollar
-0.01%
GC
0.03%
SI
0.03%

Gold

  • Gold (XAU/USD) initially beat 3390 for an important buy signal, hitting targets of 3393, 3400, 3405 and 3420/3425.
  • However, Gold unexpectedly collapsed from 3438, breaking strong support at 3410/07.
  • The break below 3400 hit the downside target of 3389/87 and we fell as far as 3375.
  • The false breakout fooled me, and yesterday’s bearish engulfing candle indicates a bull trap, meaning further losses are expected into the end of the week.
  • We now have resistance at 3389/93 so we could see a high for the day here on any short-term recovery.
  • Shorts need stops above 3398.
  • A break below 3373 is more likely and targets 3365/60.
  • A low for the day is certainly possible here in short-term overbought conditions - it’s a little risky and longs need stops below 3355 but if the level holds we could see a good bounce to 3374 and as far as 3385, so it could be worth the risk.
  • Just be aware that a break below 3355 targets a buying opportunity at 3343/39.
  • Longs need stops below 3333 - targets: 3357, 3365 - 3372 looks possible.
  • Just be aware that if Gold unexpectedly beats 3398, we can target 3405/08, but unlikely any further.

Gold Chart

Silver

  • Silver (XAG/USD) unexpectedly collapsed from 3952 and broke back below 3915/10, so bulls have lost control and longs in the short term.
  • We just made an overnight low 2 points above the support at 3875/70.
  • However, I think this level will be broken at some stage today, and we will continue lower towards better support at 3853/48.
  • A low for the day is likely here, but longs need stops below 3840.
  • Targets: 3864 and 3873 for profit taking.
  • Just be aware that a break below 3840 risks a slide to 3800/3790.

Silver Chart

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