XAUUSD, Time frame: 4h, Tools: SMA100XAUUSD, Time frame: 4h, Tools: SMA100

Gold Technical Analysis

The attached chart shows that gold prices continue to trade sideways within a range defined by resistance near $4,230, which prices have attempted to break above on several previous occasions, and support near $4,070, from which prices have rebounded positively several times.

The significance of these levels is reinforced by the following factors:

  1. Gold prices remain below the resistance level represented by the 100-period moving average.
  2. The current sideways movement is forming a technical pattern known as a rectangle pattern.
  3. Finally, this sideways movement is taking place within the context of a preceding downtrend.

Accordingly, the expected price movement could equal the height of the rectangle pattern ($4,230 − $4,070 = $160).

Gold is therefore expected according to analysts, to move by approximately $160 upward following a breakout above the $4,230 resistance level, or downward following a breakdown below the $4,070 support level.

Gold Fundamental Analysis

Gold prices are currently influenced by several fundamental factors, including bond yields, inflation, and oil prices. These factors can be summarized as follows:

  1. Rising oil prices: Brent crude is trading near its highest levels in five months, raising concerns about the impact on inflation and interest rates.
  2. Upcoming Federal Reserve meeting: Gold investors will be closely watching next week's Federal Reserve monetary policy meeting for clear signals regarding the future path of US interest rates.
  3. Recovery in the technology sector: The technology sector is recovering from the sharp losses that drove the Nasdaq index down by more than 5% last week, boosting investors' appetite for riskier assets.

Ultimately, the key question is: How will gold's current sideways movement end? Will prices break above the $4,230 resistance level or fall below the $4,070 support level?