Will gold price extend its range as dollar strength and Fed news weigh?

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Gold drops 0.63% today to $3,996

Highlights

Gold weakened as the US dollar strengthened after the Federal Reserve's policy announcement, making non-yielding assets less appealing.
A recent sharp sell-off and break below key monthly support increased technical selling and led to more cautious market positioning.
Gold trades below key moving averages with bearish momentum, expected to consolidate between $3,973 and $4,019 over the next few sessions.

Renewed dollar strength and technical breaches drive defensive positioning

Gold’s recent move followed renewed strength in the US dollar after the Federal Reserve’s latest monetary policy announcement, which typically increases the opportunity cost of holding non-yielding assets and has made gold less attractive, according to FXStreet. Recent trading has also been influenced by a sharp sell-off last week, as noted by Forex, which may have contributed to more cautious positioning among market participants. Technical analysis from Stonex highlights that gold has slipped below key monthly support, with daily closes under this level potentially accelerating downside momentum owing to technical selling.

Bearish momentum falters amid oversold signals and mixed oscillator cues

On the technical front, XAU currently trades below its MA-20 ($4,006), MA-50 ($4,028), and MA-200 ($4,373), with immediate resistance seen at the Ichimoku Kijun level of $4,003. MACD continues to point toward a sell bias, while ADX remains neutral, reflecting a lack of strong trend conviction. RSI is at 31.49 and CCI readings indicate oversold conditions, though Stochastic RSI signals a strong buy and Bull/Bear Power highlights ongoing seller dominance. The Awesome Oscillator also trends lower, though some oscillators diverge—underscoring a potential pause or short-term bounce amid prevailing bearish momentum.

Consolidation likely as scenario hinges on $4,003 resistance break

In the short term, XAU is expected to remain within a volatility band stretching from $3,973 to $4,019 over the next two to three trading days. The probability of further downside stands at 52%, while the chance of an upward move is estimated at 48%. The baseline scenario involves consolidation in today's range; an upside scenario would require a clear break above resistance at $4,003, whereas breaching support near $3,973 could trigger renewed selling pressure.

Anton Kharitonov, expert at Traders Union, sees fragile sentiment in gold with the US dollar weighing on demand. Technicals remain bearish as the metal holds below key averages, and oversold signals are not confirming a reversal yet. He remains cautious as sellers are still in control despite some indicators hinting at a possible pause. "Until gold reclaims $4,003, any strength is likely corrective and downside risks prevail."

Earlier, analysts noted that gold markets were being shaped by a combination of macroeconomic drivers and structural challenges, with persistent factors such as high prices and uncertain broader conditions influencing both formal and informal trading activity. The technical picture now points to a continued consolidation phase, with traders advised to monitor the key $4,003 resistance level, as a decisive break in either direction could set the next short-term bias for gold prices.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.