Missed the gold rush lately?
The precious metal has staged one upside break after another, boosted by a combination of risk-taking and dollar weakness in the past few days.
But now I’m seeing signs of a pullback on the 4-hour chart of XAU/USD, so better keep these levels on your radar!
Gold (XAU/USD) 4-hour Chart by TradingView
If you’ve been feeling left behind by the gold rallies these days, you’re not alone!
Market players have been watching closely as the commodity had been breaking one record high after another, and it looks like the time for a correction is finally upon us.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on gold and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Using the Fibonacci retracement tool on the latest run higher shows that the 50% to 61.8% levels span an area of interest or former resistance zone around $2,060 to $2,100.
This is also right around the 100 SMA dynamic support, which is above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to resume than to reverse.
Stochastic may be on the move down for now, but the oscillator is approaching the oversold territory to signal that sellers might be exhausted soon. Turning higher might be enough to convince gold bulls to charge again, possibly taking XAU/USD back to the swing high near $2,200 or onto the next upside target at R1 ($2,223.05).
Don’t forget that several U.S. economic data points are lined up this week, which could mean extra volatility for this inflation hedge.
Do you think gold prices are poised to set fresh record highs soon?
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