Gold consolidates below record – Will extend higher or face rejection?

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.