Did you miss gold's strong breakout?
This could be your chance to follow the trend if you are still bullish on the precious metal!
Take a look at this confluence of levels I'm seeing on the 4-hour time frame.
Gold (XAU/USD) 4-Hour Frame Chart by TradingView
Watch out, gold bugs!
The shiny metal appears to be in correction mode after its bullish breakout of the strong ceiling at $2,400. The price has rebounded from R1 ($2447.63) and is now approaching support areas marked by Fibonacci levels.
Risk-off flows early in the week appeared to support safe-haven assets, as traders were wary of a possible renewal of geopolitical tensions in the Middle East. However, the US dollar's bullish tendencies caused by the Fed's hawkish comments appear to be capping gains.
What will the minutes of the upcoming Federal Open Market Committee (FOMC) meeting bring for gold prices?
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven't done your financial homework on gold and the US dollar yet, it's time to check the economic calendar and stay up to date with daily fundamental news!
Remember, Fed officials have been lamenting the “lack of progress” on inflation, so repeating the need to maintain their restrictive policy for longer could mean a new uptrend for the US currency.
This could lead the XAU/USD pair to fall to the interest zone at 50% Fibonacci level and pivot point level ($2,389.87) and support the ascending channel in the short term. If this is enough to attract more gold buyers, the precious metal could still resume its rise to the swing high or to new highs at R2 ($2,480.55).
A break below the bottom of the channel and S1 ($2,356.95) could trigger a reversal from gold's rally, especially if FOMC minutes confirm that policymakers are backing away from the idea of cutting interest rates three times this year.
Whichever trend you choose to trade, make sure you stick to your risk management plan and that you keep a close eye on any major headlines that may impact the gold price movement!