XAU/USD, the trading pair that reflects gold’s value in US dollars, is on a multi-decade bullish trajectory. It has jumped above the horizontal 20-day Simple Moving Average (SMA), currently near $4,082.65. On Monday, the price even exceeded the $4,100 mark for the first time, reflecting a bullish trend in the gold market. Proponents hope this momentum will carry to further victories. That will particularly be the case if it continues to hold above key support levels.
On balance, the technical indicators are showing strong bullish tone for XAU/USD in the near term. The price is now finding support above the 100-period SMA at $4,052.58, which is acting as first line of support. In the daily chart, incidentally, it is far away from historical averages represented by the 200-day SMA at $3,383.46 and the 100-day SMA at $3,621.50. This infusion of liquidity combined with ongoing inflationary pressures and geopolitical uncertainty further lays the groundwork for continued upward momentum in the price of gold.
The Momentum indicator is on board as well, showing the bullish alternate. It is definitely going north and even going up almost straight up, yet it is still under the 100 line. Secondly, as it breaks out above its midline, this indicates a growing intensity of buying pressure. Market participants view this uptrend as a bullish signal of increasing demand for gold. That can only point to more upward pressure on prices.
A continued push above the 20-day SMA would add to the case for an upside bias for XAU/USD. Analysts are looking at the previous all-time high, in the $4,380 price area, as a potential target if bullish momentum continues. The dynamics of supply and demand will play a crucial role in determining whether gold prices can maintain this momentum in the coming days.
With XAU/USD on a continued uptrend, participants in the market will be on the lookout for any changes in the market that would affect this upward trajectory. The overall market sentiment remains positive, exhibiting a bullish near-term sentiment. Be wary of outside influences such as geopolitical developments and economic data releases that have the potential to affect future price direction.