Gold Consolidates Near Trend Lows Ahead of Next Advance

Gold prices have been consolidating near trend lows but below key trend resistance, setting the stage for a potential breakout and advance.

A pullback to test prior resistance areas as support is common following key breakouts, and once that pullback completes, the dominant trend should be ready to reassert itself. For gold, that would be the developing uptrend that began from the recent higher swing low of $3,959 in mid-July.

Wednesday's low of $3,996 is now a key support level, and a drop below it will weaken the chances for the trend reversal to succeed. Recent signals are still early and require further confirming evidence of improving demand.