Gold at 4,147 support — breakdown to 4,110 or reclaim 4,193? | XAUUSD Oct 1

Hi everyone, Daniel here, an active prop trader. Gold is bearish today. Since last time, the short-term uptrend kept running, but once price overshot the channel line, it reversed exactly as our scenario called for, and we saw a sharp drop worth 754 pips.

Right now we've flipped to a downtrend on the 1H chart. If a time-based correction sets in and price pushes on to make fresh lows, I'm looking for a slide down toward the 4,110 area. The big question is whether this downtrend keeps extending, or whether we break back above that recent key high and switch to a bullish bias.

That's exactly what I wanted to highlight today. So let's jump straight in and go through the daily chart in detail. On the daily chart, gold closed out the prior session as a bearish doji candle, right at that level.

The scenario I laid out yesterday focused first on the most recent candle — that big bearish candle showing really strong downward momentum. Since the near-term trend was clearly down, the natural expectation was a brief time-based correction followed by another leg lower. That was the bearish scenario.

On the bullish side, the scenario was for this bullish candle to actually act as a bullish reversal. Now, what kind of price action confirms a bullish reversal? It comes down to the follow-through to the upside.

Naturally we'd need to break the prior high, but the real thing to watch here is the size of that bullish candle's body. The precondition was that this bullish candle's body had to be at least as large as the prior one, ideally bigger. But in the end it closed as a doji, essentially a neutral bearish candle.

After briefly breaking the high, price got pulled right back in, so this strongly suggests the time-based correction, with this bar as our reference, is now playing out. So the main scenario from here is that price drops. On the buy side, support is most likely to show up near this bullish candle's low.

And when we break out to the downside, it tends to fall hard because it sweeps the stop losses of the bulls who rushed in too early. For that reason, I think this level will stay firmly on our radar as a key spot to target a breakout pullback going forward. So that's the framework I'm working with here.

Now let's switch timeframes and look at the 1H chart. This red vertical line marks where I ran yesterday's session exclusively for Trading Lab members. What I covered in detail back then, I'll walk through here on YouTube in a more focused way, hitting just the key points so you can follow the logic clearly.

So my main scenario here was short-term bullish. Price was clearly continuing an uptrend, trending higher in a clean, readable way, like this. Given that structure, I told everyone that on the short-term timeframe you should be positioning to the upside.

But there was a problem with how this trend was built. It was climbing inside a very narrow, right-sloping channel, a classic bull channel, and in cases like this, within a broader downtrend, Ultimately there was a high chance of a downside breakout, and looking at how small each higher high was getting, the momentum really wasn't that strong. So I told my community members the likely scenario was that this would eventually resolve to the downside with a sharp, sudden drop.

As a textbook sign before the drop, we had the overshoot of the channel line and a clear downside break of the trendline. From there, I'd walked through the whole scenario, right down to timing an entry on the pullback that followed. And for the price action leading up to this call, in the community I picked out a few key candlesticks and broke them down.

First, looking back at the price action from the broadcast before last, I focused on this bullish doji candle. Once it formed, with that much strong momentum left and no immediate downside follow-through, I'd start suspecting a sideways range was building. For the final range width, there's a candle here that tried to break below the doji and failed, so this candle and this one each acted as the upper and lower bounds, forming the sideways range you see developing here.

Right at this bullish candle we break out to the upside, and the pullback shows up as a doji-like candle. It's a bit ambiguous whether it's bullish or bearish given the size, but at least we got a pullback move, then it reversed and formed another upward swing, making two small swings in total here. Once this bullish reversal candle forms, we get a clean, easy-to-read breakout pullback even on the 1H chart, and a strong trend candle then carries price higher, continuing the uptrend.

About this rally here, this part was the spike and this part was the channel, so what we had was a classic spike-and-channel trend playing out. Then at the Tokyo session open we formed a bearish reversal candle, and again right by the book, the origin of a channel like this often gets retraced later, so price pulled back right to around there and then Tokyo shifted into a trading range. Overall a really clean, easy-to-read setup, I'd say.

And since we saw an attempt to break out of this range right at the London session open, the big-picture read was that the uptrend would most likely keep going. But given the level capping the highs sits inside this channel line, it naturally follows that the channel ultimately works its way lower from here. So how did gold actually play out in the end?

Honestly, it followed the scenario perfectly. After the uptrend kept extending, we got a clear overshoot of the channel line, and from there price dropped sharply, exactly as expected. True to theory, it ultimately carved out a wedge, and as it came back to test the origin of that wedge, we saw a sharp sell-off of roughly 754 pips in total.

So for today's community-only breakdown, I've laid out three key points and walked through both the bullish and bearish scenarios around them. First, the 1H is pointing down, so watch closely for whether this downtrend keeps extending. Second, recent downside momentum has been strong, so stay alert for another drop off any bounce.

And finally, if we confirm a higher low or a strong rally, I'd consider flipping to a bullish bias — I cover all of that in much deeper, concrete detail inside. I walked through exactly which signals to watch inside the community. That wraps up today's gold update.