Gold Defends $4,600: Can XAU/USD Resume the Rally Toward $4,700?

Commodity

Summary:

XAU/USD is hovering around $4,600, after briefly falling below the level as hotter U.S. inflation and a firmer dollar pressured precious metals....

BUY XAUUSD

EXP

TRADING

4600.04

Entry Price

4700.00

4550.00

4598.75 -2.47 -0.05%

0.0

Pips

Flat

4550.00

Exit Price

4600.04

Entry Price

4700.00

Overall

Gold's current price action is best understood as a retest of the $4,600 breakout zone rather than a confirmed bearish reversal. The metal reached a three-month high near $4,700 earlier this week before retreating after stronger U.S. inflation data pushed Treasury yields and the dollar higher. Reuters reports spot gold around $4,590.21, following a 1.4% decline in the previous session.

The immediate macro conflict is clear. Higher U.S. inflation increases the probability that the Federal Reserve keeps policy restrictive for longer, which normally hurts non-yielding gold. CME-based pricing currently shows only a 36% probability of a September hike, but the probability rises to roughly 72% by December, meaning the market is becoming more cautious about future monetary easing.

However, gold has another source of demand: concerns over U.S. fiscal sustainability and currency debasement. The recent Treasury decision to increase long-duration bond buybacks has reinforced this theme, helping explain why gold remains close to record territory despite rising yields.

Therefore, $4,600 is strategically important. If buyers continue defending this level, the current decline can be interpreted as profit-taking after the $4,700 test rather than a structural reversal.

Market Sentiment

Sentiment is cautiously bullish, but significantly more volatile than earlier in the rally. Traders are reducing aggressive positions ahead of Warsh's Jackson Hole speech, while sticky inflation has created uncertainty over the Fed's future rate path.

The interesting signal is that gold has not collapsed despite the stronger dollar and higher yields. The metal remains around $4,600 after a substantial correction, suggesting underlying demand is absorbing selling pressure. Gold is also still up more than 13% month-to-date, showing that the broader momentum remains powerful.

For the BUY setup, the critical confirmation is whether $4,600 transitions from psychological resistance into intraday support. Holding this level and reclaiming $4,620–$4,630 would suggest sellers are losing control. Conversely, sustained trading below $4,580 would weaken the setup considerably.

Technical Analysis

Gold Defends $4,600: Can XAU/USD Resume the Rally Toward $4,700?_1

Using Bollinger Bands (20,0,2), Ichimoku (9,26,52), and Stochastic (5,3,3), the M15 setup favors a tactical BUY from $4,600.

Bollinger Bands remain relatively wide following the recent $4,700 rally, confirming elevated volatility. Price has moved from the upper band back toward the middle region around $4,600. If the middle band holds and candles begin closing above $4,620, the setup would indicate that the correction is being absorbed rather than accelerating. A renewed upper-band expansion could then target $4,680–$4,700.

Ichimoku remains constructive while price holds above the M15 cloud. The recent decline has reduced the distance between price and Tenkan-sen/Kijun-sen, creating a healthier technical structure. A bullish Tenkan-Kijun crossover around $4,600 would provide additional confirmation. A decisive M15 close beneath the cloud, however, would invalidate the immediate continuation thesis.

Stochastic (5/3/3) is the preferred timing signal. After the sharp correction from $4,700, the oscillator has room to reset. The ideal BUY signal is a bullish crossover from the lower-middle region while price continues holding $4,590–$4,600. This would indicate sellers are becoming exhausted without requiring gold to reach deeply oversold conditions.

The immediate support zone is $4,580–$4,600, followed by the stronger structural area around $4,525. FXStreet identifies $4,583 as the first important support and the 200-day SMA around $4,525 as the next major level. Resistance is concentrated around $4,700, followed by approximately $4,775.

The setup therefore favors buying $4,600 with controlled risk, targeting a retest of the recent high rather than assuming an immediate breakout to new records.

Trade Recommendation

Entry: 4600

Take Profit: 4700

Stop Loss: 4550

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