All that glitters is Gold: Bullish trend emerging
|Gold (XAU/USD) has been showing promising signs of bullish momentum. Following a sharp decline early in the week due to geopolitical concerns, the metal has steadily recovered, forming a pattern of higher highs and higher lows—clear indicators of an upward trend. The suggestion to "buy on dips" aligns with this technical setup, as gold seems poised to rally further if key levels are breached.
Technical indicators
RSI (Relative Strength Index):
Positioned above the midline on the 4-hour chart, indicating bullish sentiment and strong upward momentum.
50 EMA (Exponential Moving Average):
Acting as a dynamic support, reinforcing the bullish trend by cushioning price pullbacks.
MACD (Moving Average Convergence Divergence):
Displays upward momentum with a relatively strong histogram volume, affirming potential for further price increases.
Key support and resistance levels
Resistance:
$2665-$2668: Immediate resistance zone. A sustained break here could propel prices toward $2688-$2692.
$2710 and higher: If momentum persists, the next resistance could be tested.
Support:
$2634-$2628: Initial support. A break below may lead to declines toward $2621-$2618.
$2605: Stronger support zone below $2618, where buying interest may re-emerge.
Economic data to watch
Upcoming U.S. economic indicators could heavily influence market dynamics:
- ISM Manufacturing & Services PMI
- Non-Farm Payrolls (NFP) and Unemployment Rate
- Average Hourly Earnings
- JOLTS Job Openings
- UoM Consumer Sentiment & Inflation Expectations
These data points could shape expectations for U.S. Federal Reserve policy, impacting gold's movement.
Trading strategy
Buy opportunities: Enter long positions on dips near support zones ($2634-$2628), targeting resistance at $2665 and beyond.
Risk management: Use stop-loss levels below $2605 to protect against downside risk.
Monitor key events: Stay vigilant around the release of economic data, which could induce volatility and influence short-term price action.
This bullish outlook is supported by technical indicators and broader market conditions. Active traders and investors should maintain a watchful eye on resistance levels and economic data for confirmation of sustained bullish momentum.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.