Gold Stuck at $4,094: Dollar Weakness and Hawkish Fed Keep Prices Tethered

Gold prices have been stuck in a technical tug-of-war, as buyers struggle to break through the $4,094 resistance level. Despite slipping 1.4% on Friday, gold is still on track for its first monthly gain in five months, up about 1.4% in July and 21.5% higher year-on-year.

The metal's price action has coalesced into a symmetrical consolidation triangle on the daily timeframe, with buyers reclaiming a long-term downtrend line this week. Chartists see upside targets at $4,159 and $4,202 if the breakout materializes, while the $3,960 zone forms the key floor on the downside.

The dollar's weakness has been a catalyst for gold's recent bounce, with suspected Japanese intervention pushing the dollar lower. This makes bullion cheaper for overseas buyers and provides an automatic bid for the metal. The Federal Reserve's hawkish tone after leaving interest rates unchanged at 3.50%, 3.75% on Wednesday has also added support.