Rising But Cautious Momentum

Although gold notched another record on Tuesday, momentum had already been showing signs of fatigue, reflected in a narrow-range session despite the breakout. Price remains within a resistance zone defined by multiple technical markers and prior hesitation around the $3,675 level. From the $3,311 swing low in late July, gold advanced by $396, or nearly 12%, with only three brief one-day pullbacks along the way. While this reflects strong demand, it also raises the risk that the market may be due for a deeper corrective phase, until recently when there were two days of lower highs and lower lows.

Short-Term Support Under Pressure

For most of its advance, gold has held above its rising 8-Day moving average, currently at $3,651. That price area was successfully tested today with the day’s low of $3,646. A decisive close below today’s low would also represent a break beneath the 8-Day average, signaling short-term weakness. Furthermore, a decline through Monday’s low of $3,627 would add further downside confirmation as that day’s low also found support around the 8-Day average.

Key Downside and Upside Levels

Should sellers press their advantage, support levels to monitor include last week’s low at $3,576 and the 38.2% Fibonacci retracement at $3,557. The 20-Day moving average, now rising at $3,532, may align with that retracement and may serve as the next dynamic support. On the other hand, if bulls regain control with a decisive rally above today’s $3,707 high, upside targets reemerge at $3,734, followed by a confluence zone between $3,782 and $3,812.

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