On May 6, gold prices stabilized and rebounded from lower levels, showing a fluctuating upward trend. This was primarily supported by a slight retreat in the U.S. dollar index from its highs and safe-haven buying driven by geopolitical tensions. Gold prices rose steadily during the morning session, indicating a shift in market sentiment from previous weakness to a recovery phase with strengthening momentum at lower levels. The overall market focus has been gradually rising.
On the daily chart, a bullish candlestick with a lower shadow formed, ending the previous consecutive decline and suggesting a slowdown in short-term bearish momentum. The four-hour chart shows progressively higher price lows, with prices stabilizing above short-term moving averages, forming an initial bullish recovery structure. The hourly chart continues to indicate a fluctuating rebound, with technical indicators arranged in a bullish pattern, suggesting that the short-term trend remains in a strengthening consolidation phase. After completing this recovery, prices may test resistance levels further.
Regarding resistance levels: The first key level to watch is around 4650, which represents the upper boundary of the short-term upward channel. Initial touches of this level may trigger technical pullbacks. The stronger resistance zone lies between 4680 and 4700, a critical platform where prices have faced selling pressure multiple times in the past. A decisive break above this zone is necessary to open up further upside potential; otherwise, prices are likely to continue trading within a range.
On the support side: The first key support level is near 4580, which serves as a crucial defensive line for bullish retracements during the day. Holding above this level would maintain the strengthening consolidation pattern. A more important support band lies between 4560 and 4575, representing the dense trading area from which yesterday's rally originated. This zone can be considered the lifeline of the current rebound. A break below this area would signal a potential end to the recovery phase, likely pushing gold prices back into a bearish downtrend.
In terms of trading strategy, short-term operations suggest focusing on buying on dips within the 4580-4600 range. Consider reducing positions when prices approach the strong resistance zone. If prices effectively break below 4590, a shift in trading strategy may be necessary.
Intraday gold trading suggestion: Buy on a pullback to 4600-4595, with a stop loss at 4580 and a target of 4650-4680.
Comments