Warning: Risk of a Price Pullback?

Gold continued its upward trend on Tuesday, achieving its sixth consecutive weekly gain and breaking through new highs. The core driver of this significant rally is growing dovish market expectations for further Federal Reserve easing before the end of the year. Although the September rate cut has been priced in by the market, most investors predict two more rate cuts in October and December, providing strong support for gold prices.

From a technical perspective, the daily chart shows that gold is extremely strong, and the MACD indicator confirms the short-term bullish trend, but the indicator has deviated seriously and entered the overbought area, suggesting that there is a greater risk of technical correction in the later period. Focus on the support provided by the MA5 moving average below; a break below could trigger a deeper correction.

Traditionally, caution is advised. Short positions can be taken at highs with a small position. Upper resistance is expected to be in the 3790-3800 range, while lower support lies in the 3750-3735 range.

Trading Strategy:

Short at 3775, add to positions upon a rebound to 3785-3790. Stop loss at 3800. Profit targets 3750-3740-3730.