Gold prices have been riding high lately but are currently stalling at a key resistance zone.
Will the channel resistance hold and force the precious metal to retreat?
Better keep your eyes peeled for a potential correction to these levels!
Gold (XAU/USD): 4-hour
Gold (XAU/USD) 4-hour Chart by TradingView
Easing speculations are back to haunt the U.S. dollar once again, as downside surprises in inflation and consumer spending data revived hopes for a September interest rate cut.
As a hedge against inflation and the dollar’s moves, gold has been taking advantage of this market shift, enough to set fresh record highs so far this year.
Can it sustain the climb, though?
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!The rally is hitting a ceiling at the top of a newly-forming ascending channel visible on the 4-hour time frame, so profit-taking could spur a pullback to nearby support zones.
The Fibonacci retracement tool shows that the 50% level lines up with the mid-channel area of interest and pivot point ($2,395.20) near a major psychological mark. A larger correction could reach the 61.8% Fib closer to S1 ($2,365.40) and the 100 SMA dynamic inflection point.
The 100 SMA crossed above the 200 SMA to suggest that the path of least resistance is to the upside or that the uptrend is more likely to resume than to reverse.
If any of the Fib levels are enough to keep losses in check, look out for a rally continuation back to the swing high at R2 ($2,478.11) and channel top.
Better keep tabs on this week’s set of top-tier catalysts to gauge USD direction and overall risk sentiment, too!