Spot Gold (XAUUSD) has been under close observation, particularly as it has been trading within its established retracement zone of $4,744.35 to $4,427.82 for the past eight weeks. This range lies within a broader main range of $3,886.46 to $5,602.23, and has set the stage for a particularly neutral market tone. Current sentiment leans bullish for prices above $4,744.35 and bearish below $4,401.82.
Examining the minor range, which spans from $4,099.12 to $4,891.54, the retracement zone is identified between $4,495.33 and $4,401.82. Last week, Spot Gold closed at $4,501.01, nearing the support zone and indicating a cautious approach among traders who seem to be strategically buying on dips rather than actively pursuing bullish positions.
Additionally, the intermediate range from $5,419.66 to $4,099.12 further complicates the outlook with a retracement zone at $4,850.68 to $5,028.04 acting as a hurdle. This zone previously halted the rally at $4,891.54 in mid-April, suggesting psychological hurdles for buyers seeking to push prices higher.
Should buyers harness the momentum from the previous week, there is legitimate potential for a breakout above the pivotal level of $4,744.35, which would target the resistance range of $4,850.68 to $5,028.04. Conversely, if sellers take control before reaching this level, a retest of critical support at $4,495.33 to $4,401.82 may occur, a zone that holds long-term significance at the 61.8% Fibonacci retracement level of $4,427.82. This area could provide an opportunity for new buyers to step in.
As the main trend remains upward, the prevailing market strategy focuses on “buy the dip.” However, for substantial upward movement to materialize, buyers must begin to actively engage and overcome selling pressures. Until that dynamic changes, traders should anticipate continued neutral to rangebound trading conditions.
