Gold has been cruising above an ascending trend line, and it looks like another dip is taking place.
Will we see another bounce to new highs soon?
Or has the trend reached the bend at the end?
Gold (XAU/USD) 1-hour Chart by TradingView
A combo of safe-haven flows and a bit of anti-USD sentiment has been lifting this precious metal higher lately!
Gold has formed higher lows connected by a rising trend line that’s been holding so far this month, and another dip is currently taking place.
After all, stronger than expected U.S. CPI data convinced dollar bulls to charge on stronger expectations that the Fed might delay interest rate cuts this year.
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!
Technical indicators are still suggesting that the gold uptrend is more likely to resume than to reverse, as the 100 SMA is above the 200 SMA to signal upside momentum. In addition, the faster-moving MA lines up with the trend line to add to its strength as a floor.
XAU/USD also seems to be finding buyers at the 38.2% Fib that also coincides with the trend line support. Larger dips could still test the lower retracement levels, but the line in the sand for a bullish correction might be the 61.8% level near the $2,300 mark, 200 SMA dynamic support and pivot point level ($2,296.40)
If any of these are able to keep losses at bay, gold could resume its climb to the swing high that is right around R1 ($2,364.27) or even to new highs at R2 ($2,398.39) near a major psychological mark.
Can the next set of potential market catalysts extend gold’s rally or spur a technical reversal?
