XAUUSD: Structural Reset into New Year Reference LevelsGold (XAUUSD)CAPITALCOM:GOLDVaultX_TraderGold is trading near $4,371, down sharply from its recent record highs but reacting to a high-probability demand zone. This decline is viewed as a structural mean-reversion move to flush late-breakout liquidity before the start of 2026. 1. The Technical Breakdown (The "Now") The Rejection: The metal suffered its largest single-day percentage decline since October on December 29, dropping over 4% from a Friday high of $4,536. Key Support Pivot: Price is currently hovering around $4,371, aligning with weekly reference levels and a major rising trendline. Indicator Outlook: The RSI on the 4-hour chart is in the oversold zone (36) and turning upward, suggesting the immediate decline may be exhausting. However, VWAP and the 20-period SMA remain above the market price, indicating that bears still hold the short-term edge. 2. Potential Market Possibilities Possibility A: The "New Year" Recovery (Bullish) The Setup: A successful hold above the $4,313 – $4,342 support band. The Move: A breakout back above the $4,373 level on increased volume. Target: A primary return to $4,441, with extended 2026 targets of $4,500+ as geopolitical tensions (Russia-Ukraine/Iran) continue to underpin safe-haven demand. Possibility B: The Deep Correction (Bearish) The Setup: Failure to maintain the current demand zone at $4,370. The Move: A continuation of the "Three Black Crows" pattern seen on the 4-hour chart. Target: A slide toward deeper liquidity at $4,265 – $4,240, or even a technical target of $4,041 by early January if year-end position-squaring intensifies. Possibility C: The Holiday Range (Neutral) The Setup: Thin trading volumes during the New Year holiday period. The Move: Choppy, non-directional "crabbing" between $4,310 and $4,370. Outcome: Stability returns after January 10, once institutional "big money" re-enters the market for 2026. 3. Strategic Roadmap for 2026 Despite the current volatility, major banks maintain a strong bullish outlook for the upcoming year: JP Morgan/BofA/HSBC: Forecast gold pushing toward $5,000/oz by late 2026. Key Drivers: Central bank demand (estimated at 755 tonnes for 2026), falling real yields, and US fiscal concerns.