Gold bears have been in control lately, pushing XAU/USD down nearly 7% from its recent all-time highs.
But could the shiny metal find strong support at a key technical confluence zone that could spark another leg higher?
Check out these inflection points we’re watching on the daily time frame:
Gold (XAU/USD) Daily Chart by TradingView
The U.S. dollar has been on a roll since Trump’s election victory, which pointed to inflationary policies that may keep U.S. interest rates higher for longer. At the same time, a risk-friendly trading environment weighed on the demand for safe havens like gold.
Now that the dust is settling, more than a few market players are starting to worry about growth amidst a high interest rate environment and trade protectionism among the major economies.
Will gold demand pick up again in the next few days?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on gold and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Gold has pulled back sharply from its record peaks around $2,800, but some technical indicators suggest this retracement could be running out of steam.
See, XAU/USD has dropped to test a potential support zone near $2,570, where three key technical levels align:
What makes this area particularly interesting is that the 100 SMA remains above the 200 SMA, suggesting that the longer-term uptrend is still intact despite the recent pullback.
The next key resistance levels to watch if buyers step in here would be S1 at $2,635 and the pivot point at $2,712. A break above these barriers could pave the way for a test of R1 near $2,821, with R2 around $2,898 potentially opening the door to fresh record highs.
However, if the support zone fails to hold, bears could push prices lower toward the 61.8% Fibonacci level around $2,480, where another bounce attempt might emerge.
Think gold prices are ready to resume their climb? Or will bears manage to break this technical support zone?
As always, watch out for headlines that could impact overall market sentiment, and make sure you practice proper position sizing when taking any trades!
