Gold has been on a steady climb with higher lows connected by a rising trend line that’s been holding so far this year.
Can another test of support attract more buyers?
Better keep your eyes on these inflection points on the hourly chart!
Gold (XAU/USD) 1-hour Chart by TradingView
The safe-haven precious metal has drawn plenty of support over the past weeks, from Greenland-related geopolitical tensions to Europe’s threats to dump Treasuries, not to mention the Middle East conflict and challenges to Fed independence.
Upcoming U.S. core PCE price data could also contribute to XAU/USD volatility, as the Fed’s preferred inflation measure could strongly influence dollar direction and overall sentiment.
So, which way could gold prices be headed next?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and gold, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Gold seems to have found a ceiling near R5 ($4,905.51) as it pulled back from its latest run, testing support around R3 ($4,774.24) and the 38.2% Fib level.
A larger correction could still dip to the 50% retracement at R2 ($4,708.60) or the 61.8% level closer to the ascending trend line, which might be the line in the sand for a bullish pullback.
Look out for reversal candlesticks at the potential support zones, as a bounce could lift the precious metal back to its swing high or to fresh all-time highs closer to the key $5,000 handle.
On the other hand, long red candles piercing below the short-term trend line could be indicative of a reversal from the uptrend, possibly dragging gold to S1 ($4,530.68) then S2 ($4,465.04) next.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
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