Gold Price Faces Growing Breakdown Risk Amidst Failed Recovery

Gold's price continues to face growing breakdown risk as sellers defend resistance levels. The metal remains under downward pressure, with bond yields reaching new highs and the U.S. dollar remaining firm. A brief bounce to a two-day high of $4,219 was quickly followed by increased selling pressure.

The failed recovery near the July high has reinforced resistance at around $4,203, signaling a bearish reversal attempt. This is particularly concerning as it suggests sellers are becoming more aggressive, with no signs of support near the prior high. Support was eventually found at $4,111, near the 78.6% Fibonacci retracement of the prior advance at $4,103.

A decisive decline below $4,103 would open the door to a deeper test of support near summer lows and increase the chance that a new lower swing low may develop, starting with a decline below the June low of $3,942. The technical indications remain bearish, with the path of least resistance still lower unless gold can produce decisive signs of strength.