Gold is struggling even as the US dollar slides toward a potentially important bearish confirmation. Sellers pushed gold to 4130.10 on Tuesday, back into a weekly bullish gap. The analysis stresses that confirmation matters more than assumptions.
Gold fell to 4130.10 on Tuesday, even though the US dollar is weakening. Dollar weakness is often considered supportive for gold prices, but the source notes that markets don't always follow that familiar relationship.
Gold slips into the weekly gap
Monday's daily close below 4170 confirmed the closure of Friday's bullish gap at 4170-4191.95. Today's move brought price back into the weekly bullish gap at 4098-4135.
That is an intraday test, not a confirmed weekly gap closure. The immediate battleground is 4156, the lower boundary of the orange consolidation and the upper boundary of the black declining channel.
Reclaiming those levels would ease short-term pressure. The bigger hurdle, however, is 4233, followed by the 4240-4250 resistance zone, which the source describes as repeatedly defended.
Levels that decide the next move
If buyers fail around 4156, another test of the weekly gap becomes plausible. Inside that gap sits the daily 78.6% Fibonacci retracement near 4113.74.
A confirmed weekly close below 4098 would be a considerably more consequential bearish development. Until then, the support scenario remains alive.
The dollar tests support
The US dollar index (DX.F) hit a low of 101.45 on Tuesday, falling below the June-July highs at 101.49-101.57. Sellers also carried it through two bullish gaps intraday, 101.60-101.70 and 101.65-101.76.
Still, the source says a daily close below 101.49 is needed to confirm the loss of that support zone. If sellers get it, the first conditional downside objective is 101.10.
The source concludes that gold bulls defended weekly support once and may have to do it again before they can think about defeating resistance.
Source: Investing.com
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