Has the precious metal reached the turning point at the end of its uptrend?
I see signs of the rally being exhausted, but we are yet to see further confirmation from technical indicators.
Check out this reversal formation I see on the 4-hour gold time frame!
Gold (XAU/USD) 4-Hour Frame Chart by TradingView
Watch out, gold bugs!
The precious metal appears to be struggling to extend its rise beyond the $2,400 level and is now falling near the support area at the $2,300 mark, perhaps completing the double top pattern.
Is the breakdown of the neckline intact?
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!
The Fed's hawkish bets continue to support the US dollar across the board, translating into declines in risk assets and commodities like gold in the past week.
Sustained dollar gains in the next few days may be enough to pull the XAU/USD pair below the double neckline near S1 ($2,289.60) and into a downtrend that is at least as high as the chart formation.
If so, look for a move down to the next downside targets at S2 ($2,245.20) and then S3 ($2,164.94), especially if the moving averages complete a bearish crossover.
If gold bulls continue to defend support areas, on the other hand, stay on your toes for another bounce to upside targets at the pivot point level ($2,369.86) or tops at R1 ($2,414.26).
It's best to familiarize yourself with the high-level catalysts coming this week, so you know what will happen for gold and overall market sentiment!
