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Gold Price Retraces, Consolidates, and Seeks Breakout
Completed on 1/6/2026 at 10:58
U.S.-Iran negotiations have entered the final stage, with markets awaiting the outcome of an agreement. Trump has claimed there will be a better deal, but if it fails, he will demand intervention from the "Department of War." In other words, if both sides still fail to reach an agreement, the United States is likely to resort to military action once again.
Gold prices continued to rise last Friday, with spot gold reaching a high near $4,595. However, after the London close, prices retraced, falling as low as $4,519.21 in early trading in Tokyo today. On the hourly chart, gold advanced further above $4,580 on Friday but ultimately failed to close above this key resistance level—the highest since May 15. Nevertheless, $4,500 has clearly become a significant short-term technical support level. Gold has now broken through the main descending trendline formed since May 12 on the hourly chart, and $4,500 has also emerged as an extended support zone.
A short-term retest of $4,500 in gold prices would be seen as a buying opportunity. A more favorable outlook is that prices will continue rising until Wednesday, when significant adjustment pressure may emerge. If gold continues to pull back in the near term, apart from $4,500 acting as strong support, another support level lies at $4,480. The next lower support is around $4,454, which corresponds to the 61.8% retracement of the largest gain since May 28. On the hourly chart, this area is near a former support and bounce resistance zone, suggesting stronger support should hold. Additionally, the 50SMA (at $4,486) is also a robust moving average providing solid support. Therefore, the range between $4,500 and $4,454 can be considered a buy zone. However, if gold closes below $4,450 on the hourly chart, a stop-loss should be triggered immediately. Currently, gold is trading below the 20SMA ($4,539.5), with intraday movement likely confined between the 20SMA and 50SMA. After consolidation, a breakout attempt is expected.
The above information is for reference only and does not constitute investment advice.
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