After busting through the $2,800 resistance zone, gold seems to be back in correction mode once again.
Are buyers still ready to defend these support levels?
Take a look at these inflection points on the 4-hour time frame!
Gold (XAU/USD) 4-hour Forex Chart by TradingView
This precious metal’s uptrend is still looking pretty solid, as the pair bounced off a long-term ascending trend line that’s been holding so far this year.
After all, safe-haven flows have been picking up on global economic uncertainties stemming from Trump’s tariffs threats on major U.S. trade partners. Not only could higher trade levies have inflationary effects, but these could also cause supply chain disruptions worldwide.
Is gold due for another leg higher soon?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your 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 commodity price is hovering around the 38.2% Fibonacci retracement level which coincides with the pivot point ($2.781.90) but could still be due for a larger correction to the 50% Fib at $2,773.95 or the 61.8% level closer to the trend line support at $2,673.46.
Keep an eye out for reversal candlesticks at these support zones, as a bounce could take gold back up to the swing high or to the next upside targets at R1 ($2,833.25) then R2 ($2,868.56). Note that the 100 SMA is above the 200 SMA and that the gap between the moving averages is widening, reflecting strengthening upside momentum.
Still, stay on the lookout for long red candlesticks closing below the trend line since this could suggest that a reversal from the uptrend could be in the works, potentially sending gold to the support areas at S1 ($2,746.59) then S2 ($2,695.25).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
