Gold at Risk of a Stronger Correction or Consolidation

Do you remember the method we used on February 12 to predict a correction is coming for XAUUSD? This time is even worse. A spike in volume on the daily chart, unseen since the -4% correction, which happened on the election of President Donald Trump in early November. The candlestick linked to the volume is a long-legged doji, which, on top of a strong rally, always shows a bearish sign.

After completing our entry points yesterday, gold rebounded strongly, allowing you to profit $100 (almost 800 pips!) in less than 2 hours. We then published a post on our Telegram channel, saying that you may take your profits and wait for the NFP.

The Non-Farm Payrolls report is due today, April 4, at 15:30 MT time. Soon after that,  at 18:25 MT time, Fed chair Powell will give a speech on the current economic situation.

As we already said in our April 1 Market Weekly Overview, if the NFP increases far less than the expected 135K (vs 151K last time), and Powell uses more dovish tones, addressing the evermore dire situation in the US stock market, XAUUSD might continue the rally higher or fall into a small consolidation at first.

In any other case, a consolidation or a drift lower is expected. As the metal previously left the 1-year upward channel it has been following since October 2023 to the upside, the price can correct to as low as $3000, going even lower if this important threshold fails to hold.

We still think that, by the end of 2025, XAUUSD is likely to reach $3200/oz and $3400/oz. However, after the best bullish quarter since 1986, the volume-spread analysis we provided at the beginning of this short article urges us to advise caution when planning your next move ahead and after the NFP report.

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