Check out this new consolidation pattern on the 4-hour time frame for gold!
Can the sideways price action continue or are we about to see a breakout soon?
Here are the upcoming turning points I’m watching closely:
Gold (XAU/USD) 4 hours Chart by TradingView
The precious metal has been making higher lows since last month and has reached a ceiling around $2,475, creating an ascending triangle chart pattern.
Gold appears to be pulling back from triangle resistance once again, which could refocus on support near the pivot point ($2,418.17) and moving averages. The 100-day SMA is above the 200-day SMA, suggesting that support is more likely to hold than break.
Or are we about to see a bull run next time?
Remember that directional biases and volatility in market prices are usually driven by fundamental factors. If you haven’t done your homework on gold and market sentiment, it’s time to take a look at the economic calendar and stay up to date with daily fundamental news!
Earlier this week, the U.S. economy posted mostly negative inflation readings, with the annualized producer price index and consumer price index coming in below market estimates. For many, this could mean more likely Fed rate cuts, which could be good for overall economic growth down the road.
As a result, demand for commodities may increase, and investors may also turn to riskier assets such as gold. In contrast, the safe-haven US dollar may suffer some declines, which may push the XAU/USD pair beyond the top of the triangle.
Watch for any move above R1 ($2,471.96) as this could pave the way for a test of the next upside barrier at R2 ($2,512.66) or even a longer-term rally at the same height as the triangle formation.