XAU/USD, the gold trading pair, recently recovered off of new weekly lows. This turf battle is indicative of a raucous boom market fueled by intense gas-fueled speculation. This renewed demand has come at a time when many are expecting (or at least hoping) for higher highs for the precious metal. Despite the duo’s promising market implications, they’re still wrestling with technical challenges that dull its bullish shine.
In one recent trading session, XAU/ USD fell as low as $3,309.96 before rebounding slightly. The duo crossed under the 38.2% retracement line for only a short time during a significant drop. This decrease happened as the price skyrocketed from $3,452.51 to $3,247.83, as it reached above $3,325. However, as the pair approached the 50% retracement level of about $3,350, sellers quickly stepped up. This decision went through even after a major bounce back.
XAU/USD trades above $3,340, a few dollars above a flat 20 Simple Moving Average (SMA). This position argues that against some significant upward momentum, the long-term outlook is still very tentative.
XAU/USD technical indicators XAU/USD has escaped from oversold levels. Despite this, they’re still deeply in the red.
The 4-hour XAU/USD chart supports a slight bearish stance, with a weak 20 SMA. It continues sinking under a level 200 SMA. This trend is a sign that the downward pressure on the price will continue until there is serious buying interest. This minimal bullish potential is backed up by resistance levels found at $3,350.18, $3,374.56, and finally at $3,390.10.
There are strong support levels for XAU/USD at $3,325.00, $3,311.70, and $3,295.50. These levels are thus creating a support for the price protection. Should it drop under these support levels, we might experience retests.
Indeed today’s trading environment exemplifies an even divided trader with frequent bearishness carefully negating rampant exuberance. Increased speculative interest having the markets betting on higher gold highs. The charts and key resistance levels say the path back may not be so clear.