Gold Drops Below $4,880 as Two-Week Consolidation Takes Hold

Gold prices have slipped beneath the critical $4,880 level, signaling short-term weakness while remaining trapped within a broader sideways structure. The move lower followed a sharp selloff that was quickly met with partial recovery attempts, indicating that the decline has not yet evolved into a sustained downtrend. Instead, price action suggests the market is transitioning into a consolidation phase.

Key Market Levels and Price Action

Breakdown Below $4,880

The $4,880 area had acted as a reliable support zone, repeatedly absorbing selling pressure. Its recent breakdown marks a technical shift, forcing traders to reassess near-term downside risk. Despite the breach, the absence of strong follow-through selling suggests the move is corrective rather than impulsive.

Next Support Zones in Focus

With $4,880 now lost, attention has shifted to the next downside levels:

• Primary support: $4,810–$4,800
• Secondary support: near $4,750

These zones represent key technical floors where buyers may attempt to stabilize price. Recent candles show tightening ranges and easing volatility, reinforcing the idea that gold is cooling off rather than accelerating lower.

As noted in the analysis, “with the break of $4,880 confirmed, attention has shifted to the next support zone around $4,810–$4,800, with an additional lower support level near $4,750.”

Resistance and Range Structure

On the upside, any rebound toward the $4,970–$4,980 zone is likely to encounter selling pressure. This area previously acted as support and has now flipped into resistance. Price behavior suggests gold is locked within a defined range, with clear upper and lower boundaries guiding short-term trading decisions.

This sideways structure is expected to persist for at least two weeks, particularly during periods of lower liquidity such as Asian trading hours.

Why This Matters

Extended consolidation phases often precede larger directional moves. If gold holds above the $4,800 area, it would signal that buyers are absorbing supply and keeping the broader bullish structure intact. However, a clean break below $4,750 could trigger stop losses and accelerate downside momentum toward deeper support levels.

Repeated failures near resistance would further confirm that the market remains range-bound, reinforcing short-term uncertainty.

Outlook and Scenarios Ahead

Gold’s current behavior reflects hesitation as traders wait for a macro or technical catalyst. The $4,800–$4,750 support zone will be decisive:

• Holding above support: keeps upside recovery scenarios alive
• Breaking below $4,750: increases the risk of a deeper corrective leg

Until a key level breaks, price action is likely to remain choppy and directionless, favoring range-based strategies rather than trend-following approaches.

Sources: Shirley