Gold draws buyers in $3960-$3996 support zone

Last week, gold sellers gained additional dominance once the price dipped under the 100- and 200-hour moving averages on Monday. Buyers were unable to regain those levels, and from Wednesday onward, the decline picked up pace.

From a technical viewpoint, that series of events is significant. When the moving averages were broken to the downside, sellers gained the first upper hand. Remaining beneath those averages—and subsequently extending the distance below them—indicates that buyers are finding it hard to reclaim control. During last week, sellers seized their opportunity and pressed the advantage.

On Thursday, the sell-off pushed under the early October trough around $4064 and then reached a floor close to $3975. By the week's close, the price had rebounded, yet the rally left sellers in a stronger position while buyers had additional effort ahead.

Is there a positive for buyers? The drop entered a swing region spanning $3975 to $3996, which drew in purchasing activity. Underneath that zone, the late June swing bottom at $3942 continues to be a key downside objective.

These price points now set the stage for the upcoming action. For sellers to continue the downtrend, they must drive the price under the swing zone and hold it there. Such a breach would then bring the June trough of $3942 into focus. Dropping beneath that level would pave the way for additional declines.

The latest price movements indicate that buyers are still willing to defend support, although the market has been choppy.

The session's low came at $3978.18, sitting inside the $3975–$3996 swing band, after which buying lifted the metal to $4026.79. That advance then turned around, bringing gold back to around $3988. Buyers once more intervened, and the price has since rebounded to approximately $4017.66.

Clearly, a contest is underway. Buyers have used the swing zone as a floor on two distinct declines during the day. That provides them with a reference point for defining and capping risk. Yet merely defending support is just the initial action. They still must prove they can exceed resistance and maintain a rebound.

The nearest upside barrier is Monday's peak of $4026.79. A climb above that mark—accompanied by a sustained stay above it—would reinforce the near-term rebound and offer buyers some additional assurance.

Further up, the more significant resistance lies around $4064.39–$4066. That zone merges the fractured early October bottom of $4064.39 with the declining 100-hour moving average at approximately $4066.

When a former support level aligns with a moving average, it produces a more distinct benchmark for both market participants. Sellers can utilize the zone to set risk parameters. Buyers must move above it to demonstrate that the rebound is gathering momentum. Until that occurs, a rise can still be interpreted as a retracement within the larger downtrend.

At the moment, sellers hold the technical edge, but buyers are putting up a fight around the support zone. If the price remains above $3975–$3996, buyers have a base from which to work. A breakdown below that range would turn attention to $3942. On the upside, surpassing $4026.79 would be positive, yet retaking $4064.39–$4066 would represent a more substantial move toward regaining dominance.