Time Zone: GMT +2
Time Frame: 4 Hours (H4)
Fundamental Analysis
Gold (XAU/USD) continues its bullish trend as investors anticipate key US economic data releases today. The Personal Consumption Expenditures (PCE) index, a crucial inflation gauge for the Federal Reserve, is set to be released, along with Personal Income and Spending reports. A higher-than-expected reading could strengthen the US dollar, potentially putting pressure on gold. However, growing expectations of a dovish Fed stance and persistent global economic uncertainties continue to support gold as a safe-haven asset. Additionally, Federal Reserve Governor Michelle Bowman’s speech could provide further clues on future monetary policy, influencing Gold/USD’s next move.
Price Action
The H4 timeframe for gold (XAU/USD) reveals a clear bullish price structure, trading within an ascending channel. The price action consistently forms higher highs and higher lows, signaling a continuation of the uptrend. Recent movement shows gold attempting to break above a key psychological level, while a rejection at the upper trendline may trigger a short-term pullback. Consolidation above this level could provide the momentum needed for further upside movement.
Key Technical Indicators
Ichimoku Cloud: The price remains well above the Ichimoku cloud, reinforcing the prevailing bullish sentiment. The Tenkan-Sen (red line) and Kijun-Sen (blue line) are trending upwards, confirming continued momentum. The cloud’s support zone aligns with recent consolidation levels, suggesting strong demand at lower levels.
Volumes: Buying interest remains strong, with volume spikes accompanying bullish moves. This confirms active participation in the uptrend. A sudden decrease in volume on further rallies may indicate exhaustion, warranting caution for potential pullbacks.
Bulls Indicator: The Bulls(13) oscillator remains positive, reflecting persistent buying pressure. The elevated levels indicate that buyers still dominate, but a declining reading while price stays high could hint at a weakening bullish trend.
RSI (Relative Strength Index – 14): The RSI is currently at 71.16, placing gold near overbought territory. While this supports strong bullish momentum, it also increases the likelihood of a short-term retracement or consolidation before another rally. A move above extreme levels may signal trend exhaustion.
Support and Resistance
Support: The ascending channel’s lower boundary at $2,750-$2,760 serves as a strong support zone, aligning with recent retracement levels.
Resistance: The $2,800 psychological level remains a key resistance; a breakout above could drive further bullish momentum toward $2,825-$2,850.
Conclusion and Consideration
Gold (XAU/USD) maintains a strong bullish trend, supported by the Ichimoku Cloud, rising RSI, and increasing volume. The ascending channel continues to define price movement, with bulls in control. However, overbought conditions suggest a potential pullback before the next leg higher. Today’s US PCE inflation data and Federal Reserve commentary may introduce market volatility, influencing gold’s short-term trajectory. Traders should monitor the gold price reactions at key levels and manage risk accordingly.
Disclaimer: The analysis provided for XAU/USD is for informational purposes only and does not constitute investment advice. Traders are encouraged to perform their own analysis and research before making any trading decisions on XAUUSD. Market conditions can change quickly, so staying informed with the latest data is essential.
