Gold at $4,000: Why $3,600 could matter next

Zorrays Junaid Alchemy Markets

Gold is testing $4,000 after slipping below its daily trend band. If that support breaks, $3,920 is the first downside target. Below it, $3,600 could offer the next meaningful bounce.

Gold: $4,000 support, $4,200 resistance

The immediate hurdle is $4,100, around the 20-day exponential moving average (EMA). The chart uses a one-standard-deviation Bollinger Bands envelope around that EMA to define the trend band.

A rebound towards 4,100–4,200 that fails to hold above the band would keep sellers in control. Losing $4,000 would expose $3,920, the measured target of the smaller head-and-shoulders pattern.

Reclaiming the band and holding above $4,200 would weaken that bearish setup.

Why $3,600 could attract buyers

If $3,920 breaks, $3,600 is the next major area to watch. Two technical references converge there: a historical consolidation zone and the anchored VWAP drawn from gold’s October 2022 low.

That VWAP tracks the volume-weighted average price since the major low. Its alignment with former trading activity makes $3,600 a plausible area for buyers to defend, rather than simply another round-number target.

A bounce from $3,600 would be an initial reaction, not proof of a trend reversal. Gold would still need to reclaim and hold above its daily 20 EMA band to confirm improving momentum.

TLT: Why higher yields are hurting Gold

Sticky inflation and higher oil prices have kept pressure on bonds. TLT, which tracks long-dated US Treasuries, on the other hand has been getting the bid in the last 3 weeks.

Conversely, Gold pays no interest. When Treasury yields rise, holding gold becomes less attractive relative to yield-bearing assets.

That helps explain why bullion can weaken even when geopolitical tensions would normally support safe-haven demand.

What would change the outlook?

A bounce that stalls below the EMA band could form the right shoulder of a larger head-and-shoulders pattern.

If that structure develops and breaks down, the 3,200–3,500 consolidation zone, centred near $3,350, becomes a possible longer-term target.

A sustained recovery above the daily EMA band and $4,200 would challenge that bearish path.

Author

Zorrays Junaid

Alchemy Markets

Zorrays Junaid has extensive combined experience in the financial markets as a portfolio manager and trading coach. More recently, he is an Analyst with Alchemy Markets, and has contributed to DailyFX and Elliott Wave Forecast in the past.

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