Where them gold bugs at?
Spot gold (XAU/USD) looks able to extend a longer-term trend after touching a couple of technical support levels.
Think the dear metal will see recent record highs this week?
Gold (XAU/USD) 4-hour Forex Chart by TradingView
In case you missed yesterday’s headlines, an absence of top-tier data releases enabled the markets to take a breather from the previous week’s prolonged moves.
JPow had his moment under the highlight, nevertheless. In a discussion, he supported further rate of interest cuts but in addition revealed that he’s only seeing around 50bps further reduction until the 12 months’s end. That is less dovish than what the markets had been pricing in, which might be why the U.S. dollar gained pips against its counterparts.
Do not forget that directional biases and volatility conditions in market price are typically driven by fundamentals. In case you haven’t yet done your homework on the U.S. dollar and gold, then it’s time to examine out the economic calendar and stay updated on every day fundamental news!
XAU/USD, which hit recent record highs near $2,685 last week, has pulled back to the $2,630 levels. That’s where the Fibonacci retracement levels and S1 Pivot Point line are! More notably, gold’s current prices aren’t too removed from a trend line support that’s been solid since early September.
Green candlesticks and sustained trading above the $2,630 zone sets XAU/USD up for a visit back to its $2,680 previous highs. And, if there’s a fundamental driver behind a bullish momentum, the yellow metal can hit recent record highs.
After all, XAU/USD can still extend its downswing. Look out for consistent trading below the $2,600 levels which might put the commodity below the 38.2% and 50% Fibonacci levels, S1 Pivot Point, and the trend line support. Consistent trading below the potential support area may attract gold bears who could drag XAU/USD to potential inflection points like $2,580 or $2,525.
Whichever way you choose to play this setup, make certain you practice proper risk management and take a look at our Currency Correlation tool!