Overall U.S. dollar weakness helped propel spot gold to its multi-week highs.
Will a technical resistance level inspire a bearish turn for the commodity?
Or will we see a breakout in the next few days?
Gold (XAU/USD) 4-hour Chart by TradingView
In case you missed it, speculations of Fed interest rate cuts weighed on the U.S. dollar for most of this week.
Spot gold, a popular alternative to the dollar, extended an uptrend that started in late June and is now trading close to the $2,400 area.
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!
Note that $2,400 is close to the R1($2,416) Pivot Point line in the 4-hour time frame. More importantly, it’s right around a resistance level that held twice since April.
Are we looking at the end of XAU/USD’s bullish run? The pair is already sporting tall wicks around the R1 resistance.
Sustained trading below $2,400 followed by bearish candlesticks could help drag XAU/USD down to the $2,367 mid-range and Pivot Point area. And, if fundamentals inspire a bearish momentum, we may see XAU/USD retest its $2,290 range support zone.
Of course, gold bugs may just be taking a breather. Look out for bullish candlesticks above the R1 and R2 Pivot Point lines, which could lead to XAU/USD breaking above its months-long range.
Good luck and good trading this one!
