Gold slid to $4,397 as profit booking gathered pace, while the Dollar Index firmed on expectations of a hawkish Fed and markets stayed cautious over fresh geopolitical developments. The move follows an earlier bullish impulsive wave that topped near $4,700, with an A‑B‑C correction now under way. Wave A is described as close to completion at $4,397, and a consolidation phase is being framed as Wave B.
Technical levels in focus centre on $4,510 as the immediate hurdle, with a breakout required to support a rebound towards $4,580–$4,620. After that bounce, Wave C is expected to resume the downside towards $4,330–$4,250, and if selling pressure intensifies the near-term decline could extend to $4,100. Traders are also watching the Dollar Index resistance at 99.90 given its influence on dollar‑denominated gold prices, while acknowledging that precious metals can react sharply to data and fiscal and geopolitical headlines.
Market Correction And Key Resistance Levels
we are currently observing a healthy correction in the gold market after it peaked near the $4,700 threshold. For derivative traders, the immediate focus in the coming weeks should be the $4,510 resistance level. If we see a strong breakout above this hurdle, we expect a short-term Wave B rebound targeting the $4,580 to $4,620 range.
To back this up, recent inflation data and Fed positioning have kept the U.S. Dollar Index strong, hovering near the critical 99.90 resistance mark. Historically, a strong dollar pressures gold, which is why the recent profit-taking dragged prices down to the $4,397 level. If the dollar fails to break its current resistance, we will likely see the projected relief rally in gold materialize.
Outlook For Traders And Investors
However, we advise caution as any recovery towards $4,600 should be treated as a temporary bounce. Once this corrective Wave B peak is mitigated, we anticipate a secondary downward wave targeting deeper value zones between $4,330 and $4,250. Derivative traders should look to reposition short bets on signs of exhaustion at those higher levels.
For long-term investors, we view this downward trend not as a market reversal, but as a prime value-buying opportunity. Geopolitical tensions remain highly volatile, which historically provides a strong floor for safe-haven assets. If selling pressure intensifies and pushes prices to our extreme target of $4,100, we expect massive buy-the-dip liquidity to enter the market.
