Chart Art: Gold (XAU/USD) Is Now Testing a Potential Long-Term Trend Retracement Level

Gold speculators have been in control lately, pushing the XAU/USD pair down nearly 7% from its all-time highs.

But could the shiny metal find strong support at a key technical confluence that could spark another rally?

Check out the inflection points we are seeing on the daily time frame:

The US dollar has been declining since Trump won the elections, which indicated inflationary policies that may keep US interest rates high for a longer period. At the same time, the risk-friendly trading environment has affected demand for safe havens such as gold.

Now that the dust has settled, quite a few market players are starting to worry about growth amid an environment of high interest rates and trade protectionism among major economies.

Will demand for gold rebound again in the next few days?

Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven’t done your 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!

Gold has retreated sharply from its record highs of $2,800, but some technical indicators indicate that this rebound is starting to lose steam.

See, the XAU/USD pair fell to test a potential support area near $2,570, where three key technical levels are in line:

What makes this area particularly interesting is that the 100 SMA remains above the 200 SMA, suggesting that the long-term uptrend remains in place despite the recent pullback.

The next major resistance levels to watch if buyers enter here will 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 the R1 level near $2,821, with the R2 level around $2,898 potentially opening the door to new record highs.

However, if the support zone fails to hold, bears may push prices down towards the 61.8% Fibonacci level near $2,480, where another bounce attempt may emerge.

Do you think gold prices are ready to resume their rise? Or will the bears be able to break this technical support area?

As always, pay attention to headlines that can impact overall market sentiment, and be sure to practice proper position sizing when making any trades!