Gold has been on a tear these days, but it looks like bulls are hitting a roadblock and could be due for a correction soon.
Is this a good chance to hop in the precious metal’s ongoing climb?
Check out these potential support levels on the 4-hour time frame.
Gold (XAU/USD) 4-hour Chart by TradingView
After hitting one record high after another earlier this week, gold appears to be taking a breather from its ascent as traders are holding out for bigger market catalysts.
The upcoming U.S. NFP report could have strong implications for overall market sentiment and risk trends, as the outcome could make or break September Fed rate cut expectations.
Will the precious metal be able to resume its climb 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 the U.S. dollar and gold, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Gold appears to be finding near-term support at R2 ($3,520.21) but could still be due for a larger pullback to the 38.2% Fib at R1 ($3,483.82) or all the way down to the 61.8% retracement level closer to the former support zone and pivot point level ($3,417.57).
Look out for reversal candlesticks at any of these zones, as these could suggest that gold bulls are ready to return and make another attempt at the all-time highs. Note that the 100 SMA is above the 200 SMA to suggest that the path of least resistance is to the upside or that a bounce is likely to take place.
However, a break below the area of interest and Fibs could suggest that dollar dominance is back, potentially dragging XAU/USD back down to the bearish targets at the swing low or S2 ($3,314.93) then S3 ($3,278.54).
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.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
