Gold at crossroads: Breakout above $4,235 or drop below $4,180?

Gold consolidates above $4180
Resistance $4235 likely to cap gains.
Strong Dollar Index keeps Gold under pressure.
Rising 10 year bond yields challenge Gold.

Sunil Kumar Dixit SK Charting

Current market structure

Gold remains relatively bearish on higher time frames as broad structure witnesses lower high and lower low.

Small time frames show consolidation above recent lows after broader sell off.

Buyers have been defending $4180 local demand zone while some accumulation is attempting to break immediate resistance $4220 above which next challenge sits at $4233 followed by major overhead supply zone $4253
If bulls succeed reclaiming $4253 with a decisive close, a further extension can take recovery a tad higher to $4285

Fundamental drivers

Strong Dollar Index, stability above 100.80 keeps Gold under pressure.

US-Iran peace agreement reduces risk sentiments and eases global tensions.

Federal Reserve hawkish stance reduces odds of rate cut.

Opening of Hormuz Strait eases Crude Oil prices.

Institutional ETF demand has weakened recently as also central bank Gold purchases decline recently.

Technical drivers

Small time frames show oversold conditions and some rebound attempts are on cards.

Sellers need additional liquidity on buy side to reposition their selling bets on higher side.

Bullish trend confirmation on strong breakout above $4255
Bearish trend continuation on strong breakdown below $4180-$4140

Author

Sunil Kumar Dixit

SK Charting

Sunil Kumar Dixit is Chief Technical Strategist and founder of SK Charting, a research firm based in India. He tracks Precious Metals, Energy, Indices and Currency Pairs. He also participates as an expert panellist on Channel Television, Nigeria.

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