Oil and Yields Rise as Gold Weakens and Stocks Hold Near Record Highs

Gold Spot Price (XAU/USD) is down about 2% after running directly into the descending trend line that forms the upper boundary of its large wedge pattern. That resistance held, and gold has now moved back toward the lower part of the wedge.

This pattern is getting increasingly important because the price has been compressed between these two trend lines for a long time. The longer that compression continues, the larger the eventual breakout or breakdown could be. The upside breakout area has fallen as the upper trend line has moved lower. Gold once needed to clear around $4,500, but the breakout level is now closer to $4,100 to $4,150. If the wedge continues without resolving, that level could eventually fall toward $4,000.

A confirmed move above $4,100 to $4,150 would improve the larger bullish structure. The first major resistance would be around $4,350, followed by $4,600, $4,900, $5,300, and eventually $5,600.

I would not expect that move to happen in a straight line. Many people bought gold near $5,000, $5,300, and $5,600. As the price recovers, some of them will sell when they return to break even. That creates additional resistance and makes a stair-step recovery more likely, with rallies followed by pullbacks and retests.

On the downside, a confirmed break below the lower wedge boundary could send gold toward $3,500, possibly with a brief move below it. I still see a reasonable chance that gold reaches that area.

However, once gold moves below $3,900, the risk of missing the larger move higher may outweigh the benefit of waiting for another few hundred dollars of downside. Below $3,900, I would begin looking at gradual accumulation. If gold never reaches that area but breaks above $4,100 to $4,150, that breakout would provide another opportunity to enter after momentum confirms the move.

Silver Spot Price (XAG/USD) still looks weaker than gold. Gold is relatively close to resolving its wedge, but silver needs to clear $64, and then the longer-term resistance near $67, before the larger bullish structure improves.

The first important support is $54. Silver recently traded down to approximately $54.77, bringing it very close to that level. I would consider beginning a position near $54, with additional accumulation levels at $50 and $46 if the decline continues.

I am more interested in waiting for long entries in gold and silver than trying to short them at these lower levels. Both metals could still move lower, but the potential remaining downside is relatively small compared with the risk of being short when a major upside breakout begins.

West Texas Intermediate Crude Oil Futures (CL) continue to push higher, with tensions in the Red Sea supporting prices. The first major resistance zone was between $87 and $88, based on several previous pivot lows and the 0.382 Fibonacci retracement. Oil moved through that zone and climbed above $92. The position was increased above $92, bringing the average entry to approximately $90.

The next major level is around $93.50, which represents the 50% Fibonacci retracement of the decline from approximately $120 to $67. If oil moves north of $93.50, that would be another area to add, with the 0.618 Fibonacci retracement becoming the next level to watch.

Oil does not have to reverse exactly at one of these prices. These levels represent probability, not certainty, which is why gradual accumulation makes more sense than expecting a perfect turn at a single number.

The U.S. Dollar Index (DXY) is also having a strong rebound, while the Cboe 10 Year Treasury Note Yield Index (TNX) has climbed to 4.7%. That combination is helping pressure gold and silver.

What stands out is that the stock market remains relatively close to its all time highs, even with oil back in the low $90s and the 10 year Treasury yield at 4.7%. If oil begins to pull back, stocks could make another push toward new all-time highs.

For now, gold is waiting for a decision near $3,900 on the downside and $4,100 to $4,150 on the upside. Silver needs to reclaim $64 and $67, while oil is approaching another major test near $93.50. This is a market where patience and price discipline matter more than trying to anticipate the move before these levels are resolved.