Our Top Chart Strategist Explains How to Trade Gold Now as Prices Disconnect from Technicals

Core Insights - Gold has experienced a significant rally, but a mean reversion is expected, with healthy corrections of 5-10% being typical before further upward movement [1] - A bearish candlestick pattern has been identified, indicating potential follow-through selling in the next 2-3 days unless gold can close above 50% of the bearish kicker [2] - Gold closed at $4,164, aligning with Fibonacci extension levels, suggesting continued strength despite bearish signals [3] Technical Analysis - A mean reversion zone is identified near $3,850 as a potential target for a pullback, while $4,277.50 is noted as the next Fibonacci extension level for a continued rally [5] - Current market behavior of gold is inconsistent with traditional technical indicators, suggesting a possible loss of confidence in the U.S. government and dollar [5] - The market strategist advises caution in trading gold, indicating a wait-and-see approach is prudent at this time [5]