Earlier this week, we spotted a bullish setup on spot gold (XAU/USD) that played out in favor of the bulls after all.
But that was a few days ago. Today, gold is knocking on a key long-term resistance zone.
Will XAU/USD bears show up to drag the precious metal lower?
Gold (XAU/USD) 4-hour Chart by TradingView
In case you missed our recent Daily Market Recaps, cooler U.S. inflation expectations have sparked hopes for multiple Fed rate cuts this year.
That’s been a drag on U.S. 10-year Treasury yields and the dollar while giving gold a solid boost as traders look for USD alternatives.
At the same time, global growth worries and uncertainty leading up to Trump’s inauguration have kept the demand for safe havens like gold alive.
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!
But that was a few days ago.
Today, XAU/USD has climbed high enough to hit the R1 ($2,720) Pivot Point line. That’s around the range resistance that’s been solid since late November!
If we see a few more red candlesticks around this area, selling pressure could kick in and pull gold back toward the $2,700 psychological level. A deeper dip to mid-range levels or even $2,650—where the 100 and 200 SMAs sit—isn’t off the table if the dollar regains momentum in the coming trading sessions.
On the flip side, if the dollar stays weak or global growth jitters push more traders toward gold, XAU/USD could break above the R1 resistance.
In that case, keep an eye out for a sustained move higher, which might set the stage for a run at $2,800 or other key levels.
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!