Spot gold maintained its elevated consolidation on Friday, August 28, easing to approximately $4,580 per ounce during early Asian trading, a notable retreat from the weekly peak near $4,696. The pullback follows gold's rally to a three-month high, but an uptick in U.S. inflation data prompted traders to reassess the Federal Reserve's policy trajectory. A wave of profit-taking emerged as a result, triggering a pronounced correction from the recent highs.
Despite the pullback, the adjustment has not morphed into a full-blown downtrend. The earlier surge to multi-month highs was driven by a softer U.S. dollar, escalating fiscal concerns, and shifts in long-dated Treasury markets. Even with a hawkish inflation reading, gold has managed to hold above the $4,500 mark, underscoring the resilience of medium- and long-term buying interest.
On the daily chart, gold printed a candlestick with upper and lower shadows following the selloff, signaling that overhead supply is being steadily absorbed. The 5-day and 10-day moving averages have turned lower, applying pressure on prices, while longer-term moving averages remain pointed higher. The broader uptrend on the bigger timeframes is still intact, positioning this as a corrective phase within a bullish structure. The MACD histogram is shrinking further, and the KDJ indicator maintains a bearish crossover at elevated levels, reflecting waning bullish momentum.
Shifting to the 4-hour timeframe, prices are oscillating within a corrective box pattern, with alternating bullish and bearish candles indicating limited rebound strength. The Bollinger Bands are tightening, with price trading below the middle band, and short-term moving averages are align bearishly, capping any recovery attempts. The RSI has slipped back into neutral territory, avoiding extreme overbought or oversold conditions. While sellers hold a short-term edge, the lack of sustained downside momentum suggests a tentative stance. The $4,540 level stands out as a critical 4-hour support-resistance pivot; a decisive break below could open the door to further downside.
On the hourly chart during European hours, moving averages are entangled, prices have pushed off the lows, and indicators are crossing back and forth, indicating no clear directional bias in the near term. European trading often brings false breakouts as key supports and resistances are tested, keeping the session range-bound.
For the remainder of the day, immediate resistance is eyed near the $4,620 area, with the initial support level being yesterday's low of around $4,570. Trading strategy: consider short positions on rebounds into the $4,610-$4,620 zone, with a stop-loss above $4,635, targeting $4,570-$4,545. Conversely, a pullback to the $4,540-$4,555 range could offer a light long entry, with a stop-loss below $4,525, aiming for $4,590-$4,610.