Gold prices pulled back to around $4,640 an ounce on Tuesday after reaching their highest level in over three months. The market is scrutinizing whether this recent pause signifies a simple consolidation or the start of a deeper correction. Short-term charts marked the $4,615-$4,623 range as the first critical support for the metal, while the prevailing trend remains positive. Investors are expected to focus on incoming US inflation data along with Federal Reserve Chair Kevin Warsh’s upcoming speech at Jackson Hole.
Spot and Futures Market Remain Stable
Spot gold eased by 0.2% to $4,640.39 an ounce as of 0334 GMT, based on data from Reuters, after hitting its three-month peak earlier in the session. US gold futures were steady near $4,696, keeping futures prices at a premium over spot. This futures-spot difference highlights persistent optimism in the futures market, as traders assess short-term risks and opportunities.
The underlying strength in gold has been attributed to a softer US dollar and falling long-term Treasury yields. This change followed a US Treasury move to expand buybacks of longer-dated securities, putting pressure on yields and boosting investor demand for non-yielding assets such as gold.
The dollar index hovered near 98.96 in Asian trading, with attention on how further Treasury interventions and US fiscal concerns could influence the global market outlook.
Key Support and Resistance Zones Under Watch
Market participants are closely tracking technical levels in the $4,615-$4,623 band, which has emerged as the first important zone of intraday liquidity. Analysts from Forex Expertise noted that holding firmly above this area could prompt buyers to challenge the $4,658-$4,668 and eventually the $4,680-$4,692 resistance zones.
Immediate upside targets remain concentrated between $4,700 and $4,712, identified as a key breakout region. Should gold sustain 15-minute closes above $4,712, technical setups signaling a bearish move would lose strength, leaving the path open for a continued rally.
On the downside, a failure to hold $4,615 would shift focus to the next major support levels at $4,588-$4,597, and then to stronger buying demand expected near $4,558-$4,568. A move below $4,558 is widely seen as confirmation of a deeper correction.
| Price Level | Role |
|---|---|
| $4,615-$4,623 | First intraday support |
| $4,658-$4,668 | Initial resistance |
| $4,680-$4,692 | Recent swing-high resistance |
| $4,700-$4,712 | Breakout zone |
| $4,588-$4,597 | Second support |
| $4,558-$4,568 | Major demand/support |
Broader Outlook Remains Constructive
Longer-term charts reflect a still supportive trend for gold. Weekly COMEX gold futures are trading near $4,693 per ounce, comfortably above the 50-week exponential moving average at roughly $4,278. The weekly relative strength index (RSI) was close to 59.7, recovering above its neutral midpoint without reaching overbought levels—a sign of improved momentum after the earlier correction from highs above $5,000.
Analysts say this broader price structure remains constructive as long as gold maintains levels above the upward-trending 50-week moving average. Renewed strength above weekly highs could bring the previous major price peak back into focus, while a dip below the moving average would likely weaken the current bullish outlook.
TD Securities stated that while gold prices continue to find support, it may be too soon for the metal to attempt a move towards the $5,350 target, especially if higher inflation continues to keep interest rates elevated.
For now, the $4,615 region serves as the critical first test for downside risk, while the $4,700-$4,712 range acts as the primary trigger for renewed bullish momentum. Sustained trading above resistance could facilitate another leg higher, but a decisive drop below $4,558 would confirm a more significant correction phase.
