Gold’s Correction: Don’t Be Fooled by Support at 3860

[m_c_jacob]

1. Yesterday’s Picture
Gold opened the month with strength, pushing into uncharted territory and printing yet another all-time high, just shy of the 3900 figure. However, momentum faded quickly, and the market corrected lower, currently holding around the 3860 support zone — roughly 300 pips under the peak.

2. Key Question
Has the correction already played out, or are we just at the beginning of a deeper move?

3. Why I See More Downside Ahead
• Fragile bids: Looking back just two sessions, Tuesday’s sharp intraday selloff highlighted how quickly buyers can step aside at these stretched levels.
• Short-term technicals: Price is still above immediate support and the rising trendline, keeping the structure bullish on paper — but this doesn’t erase the vulnerability.
• Risk/reward misbalance: Buying directly into support after a fresh ATH might look attractive, but the risk of a sharp drop outweighs the potential reward.
• Bigger picture context: Even if gold spikes once more to marginal highs, the corrective leg is unlikely to be over — in fact, it may only be starting.

4. Trading Plan
My strategy remains unchanged: sell rallies. I’ll be watching for short-term strength to fade, especially around intraday resistance zones. For me, chasing longs here is not worth the exposure.

Final Thoughts
The market remains technically bullish until support breaks, but under the surface, gold is fragile. From my perspective, the real move is still to the downside — and patience will pay off.