Let’s take a look at Gold, which has recently transitioned from strong volatility into a sideways phase.
At the beginning of March we saw a very aggressive move, but since then the market has been consolidating and moving mostly sideways. From a structural point of view, the chart resembles the classic ICT Power of Three setup.
The first stage was the accumulation phase, marked with blue. During this period the market traded in a relatively tight range while liquidity was building. After that came the manipulation phase, marked with red lines. In this stage the price briefly broke above the range, creating what effectively became a false breakout to the upside.
Now the market appears to be entering the third phase — distribution. In the ICT framework, this stage typically leads to a stronger directional move, and in this case the expectation would be a move to the downside.
At the moment, the distribution phase is still in its early stages. The decline has not yet accelerated, which means there is still considerable potential for a larger bearish move if the pattern develops fully.
From a technical perspective, sentiment remains negative as long as the price stays below the upper boundary of the range. Interestingly, the upper limit of the distribution phase coincides with the top of the earlier accumulation range, making this level particularly important.
As long as gold remains below that resistance area, the structure favors the bearish scenario and leaves room for a deeper move to the downside.