GOLD targets liquidity above 2670-2685—what’s the next play?
Gold is currently consolidating within the 2663 - 2636 range, with significant resistance and liquidity zones looming overhead. In particular, the 2670 - 2685 zone is a key battleground, where bears may aggressively re-enter the market. The recent global rally is gradually losing momentum and transitioning into a more sideways pattern between 2675 and 2604.
Key factors shaping the outlook include:
- **China's economic struggles**: After initially providing strong support for gold in response to potential fiscal stimulus, China's economy is again showing signs of weakness. This raises questions about the sustainability of gold’s earlier gains.
- **US interest rates**: With the Federal Reserve's next move still uncertain, market participants are caught between two possibilities—a pause in rate cuts or a modest 0.25% reduction. This creates uncertainty around whether gold can maintain its bullish bias, especially as it sits in a flat range with no clear breakout in sight.
- **Dollar strength**: The US dollar has been rallying on the back of last week’s economic data, and the index may have more room to climb. This strengthens the case for a more hawkish Fed, with policymakers increasingly split between aggressive and cautious stances on future rate policy.
On the geopolitical front, the Middle East conflict, which recently stoked gold’s safe-haven demand, is showing signs of easing. With some risks abating, could we see market participants start to "lock in" profits, especially as gold approaches these crucial resistance zones?
**Key resistance levels**: 2663, 2670, 2685
**Key support levels**: 2645, 2636, 2623
Given the overall fundamental backdrop, it’s unclear what factors are currently propping up gold at these levels. The price remains range-bound with no immediate catalysts for a breakout, and the looming liquidity in the resistance zone suggests any retest could lead to a reversal and correction, especially as it's been two weeks since the last such attempt.
The big question now is whether this sideways movement will eventually resolve into a deeper correction or if fresh catalysts can drive another leg higher. Either way, the market seems poised for a decisive move soon.
Key factors shaping the outlook include:
- **China's economic struggles**: After initially providing strong support for gold in response to potential fiscal stimulus, China's economy is again showing signs of weakness. This raises questions about the sustainability of gold’s earlier gains.
- **US interest rates**: With the Federal Reserve's next move still uncertain, market participants are caught between two possibilities—a pause in rate cuts or a modest 0.25% reduction. This creates uncertainty around whether gold can maintain its bullish bias, especially as it sits in a flat range with no clear breakout in sight.
- **Dollar strength**: The US dollar has been rallying on the back of last week’s economic data, and the index may have more room to climb. This strengthens the case for a more hawkish Fed, with policymakers increasingly split between aggressive and cautious stances on future rate policy.
On the geopolitical front, the Middle East conflict, which recently stoked gold’s safe-haven demand, is showing signs of easing. With some risks abating, could we see market participants start to "lock in" profits, especially as gold approaches these crucial resistance zones?
**Key resistance levels**: 2663, 2670, 2685
**Key support levels**: 2645, 2636, 2623
Given the overall fundamental backdrop, it’s unclear what factors are currently propping up gold at these levels. The price remains range-bound with no immediate catalysts for a breakout, and the looming liquidity in the resistance zone suggests any retest could lead to a reversal and correction, especially as it's been two weeks since the last such attempt.
The big question now is whether this sideways movement will eventually resolve into a deeper correction or if fresh catalysts can drive another leg higher. Either way, the market seems poised for a decisive move soon.
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