Gold Could Face Technical Headwinds Despite Broader Bullish Trend

Gold prices steadied near $3968 on Wednesday, consolidating after recent strength as traders monitor technical signals around the $3980 level — a region that has repeatedly capped upside momentum.

The metal continues to trade within a tight intraday range as investors weigh global yield trends and the upcoming U.S. inflation data, which could redefine rate expectations.

Technical Overview

On the 4-hour chart, gold is oscillating between $3898 and $4005, with the equilibrium point near $3951.

Price currently holds in the premium half of this range, where institutional supply typically emerges.

A recent bearish break of structure below $3938 signaled continuation of a corrective phase within the broader bullish trend. Current 4H candles are reacting from a supply cluster ($3985–4002) created by prior impulsive selling.

Key Levels to Watch

Resistance Area ($3970 – $3984):

This zone combines a 4H order block, 1H imbalance, and the 61.8–78.6% Fibonacci retracement of the latest downswing.

It also coincides with a low-volume node (LVN), implying potential for swift rejection if tested during active trading sessions.

Secondary Resistance ($4002 – $4010):

The $4000 psychological handle represents untested buy-side liquidity; any spike above it without volume confirmation could trigger a reversal toward $3940.

Support Band ($3928 – $3912):

Located in the discount zone of the 4H dealing range, this area represents potential institutional demand.

If price sweeps this liquidity during the New York session, buyers may attempt to re-establish positions for short-term retracements.

Macro Context

Gold’s movement continues to correlate inversely with the US Dollar Index (DXY) and Treasury yields.

Recent easing in yields has offered mild support, yet the lack of follow-through above $3980 suggests large players are defending that region ahead of key economic releases.

Broader market sentiment remains mixed: equity markets have stabilized, and oil prices remain firm, contributing to inflation expectations that could influence gold’s short-term behavior.

Outlook Summary

Conclusion

Gold’s price action near $3970–$3980 reflects a battle between intraday liquidity grabs and institutional rebalancing.

Until the market decisively breaks above $3990, the bias remains for a controlled retracement toward the $3920–$3900 discount zone.

Investors should monitor the reaction to the U.S. inflation data later this week, which could determine whether the current retracement evolves into a broader directional breakout or a continuation of the ongoing consolidation.