Missed the strong breakout on gold?
This might be your chance to catch the trend if you’re still bullish on the precious metal!
Take a look at this confluence of levels I’m watching on the 4-hour time frame.
Gold (XAU/USD): 4-hour
Gold (XAU/USD) 4-hour Chart by TradingView
Heads up, gold bugs!
The shiny metal seems to be in correction mode after its upside break from the strong ceiling around $2,400. Price retreated from R1 ($2,447.63) and is now inching closer to the support zones marked by the Fibs.
Risk-off flows early in the week seemed to prop up the safe-haven asset, as traders were wary of a potential resurgence in geopolitical tensions in the Middle East. However, bullish USD sentiment stemming from hawkish Fed commentary appears to be keeping gains in check.
What will the upcoming FOMC minutes bring for gold prices?
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!Recall that Fed officials had been lamenting the “lack of progress” on inflation, so reiterating the need to maintain their restrictive policy for much longer could mean fresh upside for the U.S. currency.
This could take XAU/USD lower to the area of interest at the 50% Fib, pivot point level ($2,389.87), and short-term ascending channel support. If this is enough to attract more gold buyers, the precious metal could still resume its climb to the swing high or to fresh highs at R2 ($2,480.55).
A break below the channel bottom and S1 ($2,356.95) could trigger a reversal from the gold rally, especially if the FOMC minutes confirm that policymakers are backpedaling on the idea of three rate cuts this year.
Whichever direction you choose to trade, make sure you’re sticking to your risk management plan and that you’re keeping close tabs on any headlines that may impact gold price action!