Selling gold amid technical overbought conditions

On Monday, August 4, gold opened at $3,364.09, showing a slight decline compared to previous sessions. The bullion is still moving sideways, fluctuating between $3,245.48 and $3,451.18. On the daily chart, the price holds above two key support levels—the 20-day ($3,339.80) and the 50-day ($3,323.09) exponential moving averages—indicating support from buyers.

On the H4 timeframe, the Stochastic oscillator (%K=89, %D=79) signals overbought conditions, which could trigger a downward correction toward the 3,300 level. However, on the daily chart, the same indicator is recovering from oversold territory (%K=44, %D=31), confirming the recent price rebound. This sets the stage for a temporary rise to the upper limit of the flat ($3,456), though a breakout above this level is unlikely due to strong resistance.

On the H4 timeframe, the EMA(20) and EMA(50) are located at the 3,324.73 and 3,332.05 levels, respectively. The gap between them is narrowing, signaling fading momentum. The price is fluctuating near these levels, treating them as support. On the D1 timeframe, the EMA(20) and EMA(50) are slowly rising. Nevertheless, a small gap between the moving averages on both timeframes highlights the current equilibrium between buyers and sellers.

An attempt of consolidating above the upper limit of the flat on the H4 ($3,352.05) would be a key near-term event. If the price fails to hold above this level and the Stochastic oscillator confirms bearish momentum on H4, a decline toward $3,300 becomes likely. The traders’ main guideline would be the daily EMA(20) at $3,339.80 and the lower limit of the flat.

Considering these mixed signals, with higher risks of short-term bearish momentum on H4, short positions are advisable upon the start of a downward move. In such a case, Take Profit could be set at $3,300, and a Stop Loss order—above $3,390.

This forecast remains relevant from August 4 to August 11, 2025.