Gold is pulling back after completing a bullish impulsive wave near $4,700, with wave analysis pointing to a bounce toward $4,580-$4,620 before a deeper corrective leg. A break below the immediate zone could extend the drop toward $4,330-$4,250, or as far as $4,100 if selling pressure builds.
Gold has completed a bullish impulsive wave near $4,700, and a follow-up A-B-C corrective wave is now underway. Wave A of that correction is almost complete at $4,397.
The metal is now forming Wave B, a bullish consolidation that traders expect to bounce toward $4,580-$4,620. That bounce depends on price clearing the immediate hurdle at $4,510 with a strong breakout, which would open the door to the recovery move.
Rejection at those highs would likely trigger fresh selling, repositioning the market toward the deeper correction zone. Value buyers, meanwhile, are seen waiting around $4,330-$4,250 for the next leg down.
Once gold completes the bounce and mitigates the $4,580-$4,620 zone, the analysis expects Wave C to form. That leg may extend the downside correction toward $4,330-$4,250. Should selling pressure intensify further, the near-term correction may extend to $4,100.
Precious metals stay highly sensitive to data and news, with fiscal and geopolitical headlines directly affecting dollar-denominated gold prices. That backdrop is part of why the current pullback is drawing close attention from traders positioning around the key levels.
Gold traders are also watching the Dollar Index, where resistance at 99.90 affects gold prices. Even so, the pullback is framed as a correction within a broadly bullish trend.
Many traders see the current drop as value buying at bargain levels rather than chasing an overheated rally, according to the analysis.
Source: Investing.com
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