[GOLD 24.05.2025] Navigate the Bearish Correction: Strategies for Profitable Gold Trades

Market Recap

Gold remains a prime asset for traders seeking volatility and risk-hedging opportunities. For those considering XAU/USD trades, platforms like Exness offer seamless execution and competitive spreads.

---

Current Price Action and Trends

Price Level:

Gold trades at $3,299.05 (as of May 21, 2025), reflecting a 25.65% YTD gain. Recent sessions show a consolidation phase after a sharp correction triggered by USD strength and profit-taking.

Trend:

Bearish Correction Phase – Gold faces short-term headwinds after a parabolic rise. Overbought conditions and USD index reversal are pressuring prices.

Key Levels:

• Immediate Resistance: $3,400 (previous high and psychological barrier)
• Critical Support: $3,150–$3,200 (previous swing low and 50-period moving average)
• Long-Term Target: $3,560–$3,925 (analyst consensus for end-of-2025)

Support:

$3,150–$3,200 (convergence of moving averages and volume-weighted support zones)

Resistance:

$3,400 (key psychological level and 200-period moving average resistance)

Long-Term Target:

$3,560–$4,152 – Bullish forecasts hinge on geopolitical risks and Fed dovishness.

---

Trading Strategy for XAU/USD

Entry Points

• Pullback Entry: Enter long on a retest of $3,200 support, targeting $3,350–$3,400 resistance. Use tight stops below $3,180.
• Breakout Entry: Wait for a daily close above $3,400 to confirm bullish continuation toward $3,560.

Risk Management

• Stop Loss (SL): Place below the recent swing low ($3,150 for long positions; $3,450 for shorts). Suggested SL distance: 30–50 pips below entry.
• Take Profit (TP):
  • Short-Term: 50–75 pips (e.g., $3,200 → $3,275 target)
  • Long-Term: $3,400 → $3,560 or $3,200 → $3,800.

Key Indicators to Monitor

• RSI: Oversold conditions (<30) signal potential buying opportunities; overbought (>70) suggest profit-taking zones.
• Moving Averages: 50-period (short-term trend) and 200-period (long-term trend) to gauge momentum and structure.

Rationale for Strategy

• Bullish Drivers:
  • Safe-haven demand from geopolitical tensions.
  • USD weakness if Fed maintains dovish stance.
• Volatility: EIA inventory reports, CPI data, and FOMC minutes may trigger sharp moves. Expect 100–200-pip daily ranges.

---

Final Advice

Trade the Pullback Strategy today: Gold’s corrective phase provides a high-probability entry near $3,200 support. Set SL below $3,180 and TP at $3,350–$3,400 (1:1 risk-reward). Monitor USD index and RSI for confirmation. For breakout traders, avoid entries until $3,400 clears decisively. Always trade with a 1:3 risk-reward ratio to optimize returns.