Gold consolidates below record – Will extend higher or face rejection?
|- Gold faces selling pressure, pullback from $4374 to $4308, consolidates between $4340-$4310.
- Dollar Index bounces off the lows, reaches 98.75, eyes next resistance cluster 99.00 - 99.20.
- Macro factors remain supportive for bullish Gold yet markets are cautious of rejection.
- Support sits at $4310 while $4343 is immediate hurdle.
Market structure
After the strong impulsive wave that reached $4375, Gold is trading sideways retracing to $4310 and holding above previous structure highs which typically indicates smart money re-accumulation and repositioning.
The sideways price pullback is a typical re adjustment and compression and not aggressive selling.
Price action is clearly printing bullish structure with Higher Highs - Higher Lows since mid November.
The last major impulsive broke above the previous swing high on 4 hour, confirming Break Of Structure(BOS)
This confirms that Gold is maintaining its bullish structure, price action is in a healthy bullish continuation pattern, definitely no signs of momentum distribution yet.
Liquidity, expansion and support
As Gold trades sideways in consolidation above the immediate support zone $4310-$4320, another bullish attempt is likely to retest record $4382 and absorb the external buy side liquidity pool resting at $4405-$4410 which if strongly established as support, can extend to $4450-$4460.
Major continuation target would be $4530.
Immediate support is seen at $4310 below which next support sits at $4290 aligning with 4 hourly 50 EMA.
If Gold breaks below $4290 and selling dominates, $4260-$4255 is a crucial support and turning point for acceleration to further downside. Until then, any downside retracement is just a correctional pullback, not reversal or trend change.
Possible scenario
A. Bullish continuation
Gold price holds above local demand zone $4322-$4317, a drop lower for liquidity absorption below consolidation range followed by compression and accumulation leading to strong impulsive wave breaking above $4382 and expansion of bullish advance towards $4420-$4450. Major impulsive target sits at $4530-$4550.
B. Deeper pullback
Gold drops to $4300-$4295, sweeps liquidity, forming a higher low and continuation to bullish rebound to new high.
C. Bearish breakdown
Gold breaks below $4290, breaks further below $4260-$4255 with 4 hourly candle closing below the zone, forming a lower low. This will confirm a momentum shift and trend flipping to bearish exposing $4220-$4200.
Overall broad outlook
As long as $4255 is not breached, confirmed by a 4 hour candle close below the zone, Gold remains a buy on dip, than selling the rally.
Prevailing sideways retracement is a consolidation and momentum accumulation or compression before breakout, not a rejection or reversal.
Sellers are unable to enforce displacement below psychological zone of $4300 and selling pressure is being absorbed by smart money building positions.
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