Buyers bought off the support, but the rebound failed under the falling trend line. This leaves gold stuck between near-term demand and the broader bear structure.
Gold traded in a narrow range after hitting the $4,020 level during the US session. One analyst cited resurgent geopolitical tensions with Iran for the move.
A number of analyst charts are now suggesting this same level range. Support lies between $4,000 and $4,020; resistance is clustered around $4,060. This could keep gold volatile within that range until one side breaks convincingly.
Gold Price Holds the $4,000 to $4,020 Demand Zone
First, the chart below shows gold taking a poke to the lower end of its recent range. Price hit $4,020 before bouncing. The bounce to this support indicates that it is holding actively.Another chart depicts the broader buy zone between $4,000 and $4,020.
The structure here indicates that price has failed a number of times to break through this level. The buy zone has held numerous tests. It has just not had the impetus to really push higher above the $4,060 zone of selling pressure.
Third, one outlook suggests $4,044 as a short-term, intraday pivot. A hold above this could facilitate short-term strength. In that case, price may work its way toward $4,060, then $4,072.If gold fails to maintain levels above $4,020, this bearish scenario could play out. Selling pressure may ramp up past $4,020 toward $4,000.
The bullish lean here could easily be erased if price sells off from $4,020 and even breaks the falling support line.
The above charts clearly highlight intraday strength versus longer-term technical strength, as price fails to gain sufficient traction.
XAU Facing Strong $4,060 Resistance
However, across all three charts, the $4,060 area marks a level of considerable resistance. One analyst sees it as a spot for a short position. A falling resistance line from earlier in the week crosses very near $4,060.
That overlapping confluence of technical analysis does well to define the $4,060 area. Buyers have been beaten back on multiple tests of this level, continually marking lower highs in the short-term trend. A surge above $4,060 should, therefore, suggest more than just a weak rebound.
A break above $4,060 would likely see the price move toward $4,072 and perhaps $4,080 if momentum continues. The $4,100 zone, marked as resistance by the third analyst, may even be possible again.
Below that level, the bearish trend remains intact. Retests of $4,060 could potentially find sellers as long as the price stays below the descending trendline. Looking for candle closes instead of intraday pokes at resistance is advised.
Daily XAU Setup Favors Range Trading
The day trend is currently caught within the $4,000 to $4,060 range. Buyers continue to defend the lower trendline while sellers reject it on rallies near the upper trendline. Neither has found total control yet.
Above $4,044, I’d look for the price to work toward $4,060 and $4,072. A sustained hold above $4,060 may point to $4,080 and then $4,100.
Below $4,060, I’d anticipate a failure to hold $4,020 and further downside toward $4,000.Geopolitical news could be a wild card to this picture. Ultimately, this looks like a price action market being held by the support and resistance levels mentioned above.
We need a clean break in one direction or another to dictate where price is headed. Short-term traders should pay close attention to price action near the $4,060 level to see whether sellers defend it or strength pushes past it.