By Ahmad Assiri, Research Strategist at Pepperstone
Gold is trading modestly lower today, down around 0.6%, following a strong 7% advance from the beginning of the year that carried prices to 4,600 range. Importantly, the modestly pullback so far appears shadow and the price action continues to reflect a sequence of higher highs and higher lows, with recent weakness looking more like digestion of gains.
Gold remains comfortably above its prior breakout zones and the current cluster around the key level 4600 is unfolding at historically elevated levels. This signals acceptance rather than rejection or exhaustion where the market pauses to absorb supply before determining the next directional move.
Rather than undermining the bullish case, today’s softness fits within a broader pattern of shallow retracements matching the past three days sentiment, and breaking a close correlation with sliver seen in recent week holding firm while silver is selling down sharply.
As long as gold holds above its first support band, 4520 range, the broader technical picture continues to favor consolidation resolving higher and keeping the path toward new all-time highs on the horizon