Gold Above 4400: The Correction May Be StartingGoldOANDA:XAUUSDMihai_IacobIn yesterday’s analysis, I wrote that although Gold had broken several important resistance levels and gained almost 10% last week, traders should start becoming cautious. After such an aggressive move, a correction was becoming increasingly likely, and I specifically pointed to prices above 4400 as an area worth watching. Well, Gold went there. During yesterday’s session, the price initially dropped toward the 4320 zone. Buyers stepped in, 4320 confirmed itself as strong support, and Gold resumed its move higher. Overnight, the rally extended above 4400, reaching a high around 4435. But what happened next is much more interesting from a Price Action perspective. Instead of consolidating above 4400 and preparing another leg higher, Gold was quickly rejected from 4435 and reversed. At the time of writing, the price is trading around 4370, which is an important confluence area between the rising trendline and horizontal support. So, 4370 becomes important. A clean break below this area would weaken the current bullish structure and add weight to the idea that the correction I've been expecting may finally be starting. There Is Another Warning Sign Besides the simple fact that not even trees don't grow to the sky, traders should also pay attention to the pattern that has gradually been developing since August 6, when Gold printed its first important high around 4300. The price action since then is beginning to resemble a rising wedge. And the important thing about a rising wedge is not simply that it exists. Patterns don't trade themselves. What matters is the combination: an almost 10% rally + a failed attempt to hold above 4400 + rejection from 4435. Taken together, these elements make the downside scenario increasingly interesting. My Bias At this moment, my bias has turned bearish, and I see potential for Gold to correct toward the 4250 zone. That doesn't mean I want to chase the price lower from wherever it happens to be trading. Quite the opposite. From a risk/reward perspective, I still believe that spikes above 4400 can offer attractive prices for selling, especially if another attempt higher is followed by rejection. The idea is simple: I don't want to sell Gold because it has risen too much. I want to sell it if the market starts showing that it can no longer sustain those higher prices. And after the rejection from 4435, we may be seeing the first serious signs of exactly that.