Gold Awaits Breakout as Compression Tightens
11 December 2025
In today’s technical analysis, let’s take a closer look at Gold, which has been trapped in a sideways movement for several days. This consolidation is marked by blue lines on the chart and can be interpreted either as a pennant or a rectangle, depending on how precisely we define the upper and lower boundaries. Regardless of which of the two we choose, the trading logic remains the same: we are in compression, and compression always precedes expansion. The next breakout will define the direction of the next wave.
From a technical point of view, the setup is straightforward. A breakout to the upside—with a daily close above the upper boundary—would generate a buy signal and open the way for a continuation toward recent highs. On the other hand, a breakout to the downside would activate a sell signal and invite sellers to target the next support zones. Until the breakout happens, Gold remains neutral and directionless.
There is another important angle here: rectangles very often develop into the “Power of Three” structure described by ICT—accumulation, manipulation, and distribution. The current sideways zone can be seen as the accumulation phase. The first breakout is often false—the manipulation—and only the second move reveals the true direction—the distribution leg. With this in mind, traders should remain cautious and not jump in prematurely. Let’s see which scenario Gold chooses in the coming sessions.