Chart Art: Gold (XAU/USD) Pulling Back to Support-Turned-Resistance Zone?

Did you miss the head and shoulders collapse we were seeing on gold prices a few days ago?

The precious metal is in the middle of a correction in this area of ​​interest!

Take a look at the near-term turning points I’m watching on the 4-hour time frame:

Watch this sharp collapse of the neckline after the US election results came out!

Investors appeared to be cashing out of their safe-haven holdings, while polls pointed to a possible win for US President Trump, with dollar bulls also blaming the Fed’s less pessimistic outlook.

However, when the FOMC statement was released, it revealed that policymakers intend to stick to their easing bias to ensure inflation moves closer to target so that the dollar ends up regaining some of its gains.

This allowed XAU/USD to rise near the broken neckline support, which may still act as resistance this time.

Is gold about to gain momentum after the sell-off?

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!

The area of ​​interest coincides with a broken uptrend line that has been holding since mid-October, as well as the 50% Fibonacci retracement level. An upper retracement could reach the 61.8% Fibonacci level near $2,734, which could be the threshold for a bearish pullback.

Keep in mind that the 100 SMA is still above the 200 SMA to indicate that the path of least resistance is to the upside or there is a chance for the uptrend to resume.

On the other hand, if any of the Fibonacci levels hold, look for gold bears to return their sights to the swing low near S3 ($2,645.33) or down to the next potential floor at S4 ($2,605.62).

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