Gold remains rangebound as $4,200-20 caps rallies and $4,100-17 support looms

Gold has spent recent weeks on the defensive, with the metal unable to find much relief on either a fundamental or technical level.

The bond market is a key part of the fundamental side. With 10-year Treasury yields holding above 5%, the cost of owning gold, an asset that generates no yield, is tough to dismiss. That factor currently carries more weight than gold's historic role as a hedge against geopolitical and inflationary pressures.

The technical backdrop reflects the same difficulty. Since the beginning of October, sellers have repeatedly protected the $4,200-20 area, and the 100-period moving average has regularly curtailed bounce attempts. After the latest rejection, gold is hovering near $4,114.

The daily price action tells a similar tale, with gold continuing to trade below its key daily moving averages and sellers therefore in command.

The $4,200-20 region remains the first barrier to gains, while $4,100-17 is now the main support zone to monitor.

In short, gold is going through a consolidation phase marked by clear technical levels. That leaves two scenarios on the table.

For bulls, protecting $4,100-17 comes first. To move higher, though, they must first produce a convincing break above $4,200-20. Only then could the 100-day moving average, now around $4,232, become a target, with $4,300 following. On the catalyst front, softer Treasury yields would help, as would continued central bank purchases of gold over the longer term.

For bears, a solid break below $4,100 would bring the $4,000 psychological level into view, with the July low near $3,960 potentially next. As far as catalysts are concerned, the persistence of 10-year Treasury yields above 5% is enough to keep markets on edge and keep gold in a tricky spot.

For now, the situation is clear-cut. Gold sits between $4,100-17 and $4,200-20, with neither haven demand strong enough to offset higher borrowing costs nor the reverse.

So until something changes, it is a waiting game. Buyers have $4,100-17 to hold, while sellers retain a firm grip on $4,200-20. With Treasury yields elevated, the burden is on gold bulls to demonstrate that they can reverse the current setup.