The Market Is Waiting for a Catalyst

Gold has just recorded its first monthly gain after five consecutive months of decline, rising by approximately 1%. This came as markets continued to process mixed geopolitical developments, while investor sentiment remained cautious.

At the start of the week, spot gold rose 0.4% to $4,055.36 per ounce as of 08:30 GMT. Although buying interest remains present, current price action suggests that the market is still in a consolidation phase, waiting for a sufficiently strong catalyst to establish a new trend.

Technical Outlook: The Triangle Pattern Is Nearing Completion

On the H4 timeframe, gold continues to trade within a narrowing triangle pattern, reflecting an intense struggle between buyers and sellers.

As the trading range becomes increasingly compressed, the market may be approaching a decisive breakout.

From a wave-structure perspective, wave e has likely been completed around the $4,120 per ounce area, which also coincides with point B in the broader wave structure. If this scenario is confirmed, the market could enter a declining wave C, opening the possibility of further downside in gold prices.

The first downside target is located near the $3,900 per ounce support zone. Should selling pressure intensify, gold may continue to retreat toward lower support levels in the coming period.

Conversely, if the price breaks above and closes firmly over $4,165 per ounce, the scenario in which wave B has ended would be invalidated. In that case, the upward trend could still have room to extend before the next corrective phase begins.

Conclusion

Gold is currently in a period of price compression, with the trading range becoming increasingly narrow. This type of market condition often appears before a significant move.

In the short term, $4,165 per ounce will be the key resistance level, while $3,900 per ounce remains the important support zone to monitor.

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