Gold Drops Over 100 Points - Post-Breakdown Review: Complete Release of Short Pressure After Technical Breakdown

Golden Cat Digger
2026.03.18

In recent days, gold has continued to consolidate in a narrow range for multiple days. Our evening analysis provided a clear prediction that once the consolidation pattern breaks, regardless of the direction of the breakout, we should directly follow the trend and place orders. A breakout after prolonged sideways movement inevitably produces significant directional moves. From a fundamental perspective, Fed hawkish expectations continue to intensify, market expectations for June rate cuts continue to cool, combined with strong U.S. employment and inflation data, reinforcing the view that elevated rates will persist longer. The dollar index has rebounded strongly, directly suppressing gold valuations and safe-haven appeal. From a technical perspective, the lower boundary of the previous consolidation range near 4960 is a key psychological support level to monitor. After the price broke below this level, short-sellers directly escalated pressure, not only breaking through the 4900 level but continuing to plunge over 100 points lower, completely aligning with the prediction that breakouts from consolidation must produce significant moves. With this type of action, there's no need to capture the entire decline—capturing just a small portion of the trend after the breakdown already yields considerable profits.

Currently, the downtrend has not completed. Although there has been minor stabilization at lower levels in the short term, both daily and hourly charts show unidirectional downtrends, with moving averages in bearish alignment, and Bollinger Bands expanding downward, indicating extremely weak bounce strength. The bearish dominant pattern remains unchanged. Key resistance above concentrates in the 4900-4920 range, with crucial support below at 4830-4840, and further down the 4800 round number support.

For midnight and subsequent operations, the strategy is clearly focused on shorting with strength on bounces, with long positions only as light-position probes of oversold bounces. On bounces to the 4900-4920 range facing resistance, directly establish short positions targeting 4850-4840, with stop loss above 4930. If price rebounds to support at 4830-4840 and stabilizes, light-position longs can attempt to capitalize on the oversold bounce, targeting 4880-4900, with stop loss below 4820. Overall, strictly follow the principle of trading with the trend, avoid blind bottom-fishing, and wait for key levels before establishing positions.

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Disclaimer: The above is merely a personal market analysis and review, and does not constitute any investment advice. Markets carry risk; trading requires caution.