GOLD – Repeated Failure Below Key $4,120/$4,100 Support Zone Keeps Bears Frustrated

Gold rebounded from a critical support area on Thursday, fully reversing the losses triggered by the stronger-than-expected U.S. CPI report and easing immediate concerns of a decisive breakdown below the pivotal $4,120/$4,100 support zone.

The precious metal initially came under pressure after September inflation data exceeded expectations, boosting speculation that the Federal Reserve could maintain a more aggressive policy stance. However, subsequent comments from Fed officials suggesting that monetary tightening should continue without urgency for action at the October meeting helped temper market expectations and support a recovery in bullion prices.

Another failed attempt to establish a sustained break below support indicates that larger bearish forces remain active but still lack sufficient momentum to force a decisive move through the $4,120/$4,100 floor. A confirmed break beneath this area would reinforce the broader bearish outlook and expose the key psychological support at $4,000.

The daily technical picture remains largely unchanged. Momentum indicators continue to recover from negative territory, supporting expectations for an extended period of consolidation, while moving averages remain in a bearish configuration and continue to weigh on the broader outlook.

In the near term, risks remain tilted to the downside as long as gold trades in the lower half of the broader $4,070-$4,230 range, leaving the $4,120/$4,100 support zone vulnerable to renewed selling pressure.

Investors now turn their attention to the release of U.S. Producer Price Index (PPI) data later today for additional clues on inflation trends. A stronger-than-expected reading could revive pressure on the yellow metal by reinforcing expectations of tighter monetary policy.

Res: 4170; 4201; 4230; 4245
Sup: 4100; 4066; 4033; 4000