Has the precious metal reached the bend at the end on its uptrend?
I’m seeing signs of rally exhaustion, but we have yet to see more confirmation from technical indicators.
Check out this reversal formation I’m seeing on gold’s 4-hour time frame!
Gold (XAU/USD): 4-hour
Gold (XAU/USD) 4-hour Chart by TradingView
Heads up, gold bugs!
The precious metal seems to be struggling to extend its climb past the $2,400 level and is now retreating close to the support region at $2,300 mark, possibly completing a double top pattern.
Is a neckline breakdown in order?
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!Hawkish Fed bets continue to prop up the U.S. dollar across the board, translating to declines for risk assets and commodities like gold in the past week.
Sustained dollar rallies in the next few days might be enough to drag XAU/USD below the double top neckline near S1 ($2,289.60) and onto a downtrend that’s at least the same height as the chart formation.
If that’s the case, look out for a move down to the next downside targets at S2 ($2,245.20) then S3 ($2,164.94), especially if the moving averages complete a bearish crossover.
If gold bulls continue to defend support zones, on the other hand, stay on your toes for another bounce back to the upside targets at the pivot point level ($2,369.86) or the tops at R1 ($2,414.26).
Better brush up on the upcoming top-tier catalysts for the week, so you know what’s coming up for gold and overall market sentiment!