As we analyze the near-term inflection points for gold (XAU/USD), we wonder if the precious metal is ready to resume its long-term ascent or if it will encounter another obstacle in its uptrend. Here’s a look at what to watch on the 4-hour chart, courtesy of Hubtrading.
Current Market Overview
Gold has shown impressive performance over the past few months, marked by a series of higher lows forming a rising trend line since August. Recently, it appears to have rebounded off this support zone, driven by risk-off sentiment and a weakening U.S. dollar, indicating that bulls may be gearing up for another push.
Technical Analysis
However, gold is currently facing near-term resistance at the upper boundary of its descending channel. This raises the question: will this ceiling hinder further gains?
Gold (XAU/USD): 4-hour
Key technical indicators point towards a bullish outlook. The 100-period Simple Moving Average (SMA) remains above the 200 SMA, suggesting that the uptrend is more likely to continue than reverse. Additionally, the widening gap between these two indicators indicates a strengthening upward momentum.
Inflection Points to Watch
- Resistance Level: If gold fails to break above the pivot point at $2,650, it may experience a pullback towards trend line support around S1 at $2,627.99 or potentially the lower boundary of the short-term channel.
- Bullish Scenario: Conversely, a breakout above the channel top could lead to a test of R1 at $2,676.47, near recent highs, or even push towards record levels at R2 ($2,699.10) and R3 ($2,724.95).
Conclusion
As always, be mindful of geopolitical developments and U.S. economic updates that could influence market sentiment. Regardless of your trading bias, practicing sound risk management remains crucial. Keep these inflection points in mind as you navigate the gold market!
