Gold at 4,696 pin bar high — hold for longs or break to 4,617? | XAUUSD Aug 25

Hey, I'm Daniel, a working prop trader, and right now my bias on gold is bearish. Since last time, the uptrend kept running, gold climbed around 521 pips, and then, right on cue with our scenario, we got a corrective pullback off the highs. From today's Tokyo session high all the way down to the current low, we've now confirmed a drop of roughly 798 pips.

The big question today is whether this drop keeps going or the structure shifts back into an uptrend, and that's exactly what I focused on. Alright, let's dive in with the daily chart as always. Gold's daily candle yesterday closed bullish and green.

As of yesterday, this is what I laid out for the daily chart scenario going forward. First off, right on scenario, once this bull flag completes, we'd have a bullish candle printing higher highs and higher lows here. So on the daily, our bias stays firmly bullish here.

That said, if today's daily candle closes bearish and drops below the prior candle's low, that changes things. If we get a move that cancels out this rally, this bearish pin bar here will likely act much like a doji, signaling indecision. I flagged that as the bearish scenario, where price could slip back inside this range.

Either way, my main scenario stays bullish, since we got that ideal pullback and the daily closed as a solid bullish candle. And as for the final daily close, just like I said at the start, it printed a clear bullish candle. Both the high and the low are stepping up from the prior candle here.

The market is unfolding exactly as our main bullish scenario called for. That said, if you look closely at the candlesticks, you'll notice the bullish bodies have shrunk quite a bit — the real body is now only about half the size, roughly 50 percent, of what it was before. So it really looks like the bullish momentum is now losing steam here.

After this, the odds of moving into a corrective phase on the daily chart now look stronger than they did based on yesterday's daily candle. On today's daily candle, whenever price tries to push up and make a higher high, we're seeing it get pulled back down. If today's daily candle closes bearish and below the low of the prior candle, that really sets up a sell scenario that traders will start watching on the daily.

That would raise the odds that we're stepping into a corrective phase here. That said, whether the broader uptrend actually breaks down isn't something we can judge from today's single daily candle alone, in my view. One key level I'm watching is the high of this bearish pin bar candle.

Whether we break through this level is what decides the overall direction I'm leaning toward here. If this high gets broken to the downside, then as I mentioned earlier, this level could act much like a doji, sending a neutral signal here. In this scenario, the odds of flipping to a bearish bias really rise.

On the other hand, if we hold this high, we can read it as a breakout pullback, and in that case the bullish bias stays intact and we keep looking for longs from here. At levels like these, we treat the broader trend as an uptrend for now. On the daily chart, we'll keep a clear line for when this trend breaks and track it closely from here.

Now let's drop down a timeframe and dig into the 1H chart together. On the 1H, our last Trading Lab community session landed right here, at this red bullish candle with the long upper wick. We ran that session right as price was retesting the top of the recent sideways range, attempting an upside breakout.

For this 1H chart, I'll walk you through a few of the key points I broke down earlier for our Trading Lab community members, focusing on the essentials. First point: right now it's more reasonable to see the uptrend still continuing. On the bigger picture it's an uptrend, so I'm biased to the upside.

That said, momentum stayed weak even after the upside breakout of the Tokyo session range. So from what looks like a trading range structure, I explained that this is a situation where we want to stay cautious about a sharp short-term drop. Let me walk you through the key points that led me to this conclusion.

The bigger picture stays bullish, but this is the price action behind why I'm now watching for a deep correction. First we broke out above this bullish doji candle, and that breakout candle was strong, but the follow-through came from a bearish reversal candle. That bearish reversal candle we treat essentially as a doji, and it went on to form the range that followed.

Once the failed downside breakout and pullback into range wrap up, price swings up again. Then a bearish reversal candle forms here, price rolls over, and drops back to test the top of the recent range. Then it rallies again, and here too you can see it carving out another small range like this.

Rather than a clean, smooth uptrend, it's more like a series of ranges stepping steadily higher over time. This is what we call a classic trading range structure forming here. When we see this kind of structure, there's a very high chance a large price correction happens somewhere along the way.

Expecting this to play out by the book, from here we get a trend structure where the base range keeps stepping higher. Assuming this kind of price action keeps carrying on the way it has, my scenario has always been that eventually we're likely to run into a fairly big correction down the line. That said, we also need to factor in how price behaves if it moves the other way.

If a clear uptrend develops that invalidates this stepping-up range structure, with strong momentum and only shallow pullbacks, then rather than waiting to fade the move and target a correction here, we need to switch our bias toward more aggressively hunting long entries. So yesterday I walked our community members through both scenarios like this. So after the session, gold moved exactly as I expected, staying in a clear uptrend and continuing to push higher.

Into the New York session open, from the pullback low it made after my post, gold ran up about 52 dollars. After that 52-dollar move, worth about 521 pips, this section here looks like a wedge to me. We got that textbook wedge correction, price tested the lower edge of the range, then rallied back up, and as it pushed slightly higher it formed a double top right there.

So we got that classic TTR, that trading range structure, playing out by textbook with a big move to the downside. Right now it's confirmed from the Tokyo session open, and this price range here From that Tokyo session high, price has dropped 79 dollars, which works out to 798 pips down from that peak. From an uptrend continuation structure all the way to a sharp drop, price has played out exactly as the scenario called for.

For today's community-only broadcast, as usual, I'll walk you through both the bullish scenario and the bearish scenario, breaking each one down across these three key points. We've got a strong downward swing in play, so I'm bearish for now, watching the London session for structure shifts and how hard lows keep breaking. If the drop continues we get a deep correction, and a reversal needs clear upward momentum — that's the three points I walked through.

Right now we're still inside that doji range I flagged earlier for the community. That wraps up today's gold analysis for you all.