Sideways Gold, Stronger Dollar: A Pause Before the BreakGold attempted a bullish breakout recently but failed to sustain momentum and is now back within a consolidation zone between 3,250–3,350. The repeated failure to break above descending trendline resistance suggests weakening buyer strength. It is currently forming lower highs, indicating distribution or sideways movement rather than a clear rally.
On the other hand, DXY has bounced from a key demand zone near 99.00, showing signs of short-term strength. It is now targeting the 102.60–104. resistance zone, which aligns with a Fibonacci retracement. If DXY continues higher, it could put pressure on gold prices in the near term.
Given this context, it is wise to remain on the sidelines for the next 2–3 weeks and wait for one of two scenarios:
1. DXY rejection from the 102.60–104 area – This would support a bullish case for gold.
2. Gold breakout above 3,400 with strong volume or need another bounce from lower support area as marked on chart which can provide confirmation of bullish continuation.
Until then, gold is likely to stay in a range or face minor downside due to DXY strength.
