The precious metal is testing a long-term area of interest and might be considering a break higher!
Can it go for the next ceiling at $2,400 from here?
Take a look at these inflection points I’m watching on gold:
Gold (XAU/USD): 1-hour
Gold (XAU/USD) 1-hour Chart by TradingView
Weaker than expected U.S. initial jobless claims led to a sharp drop for the Greenback on the ‘quietest day of the year’ for global markets.
You see, European markets were closed for the Ascension Day holiday, leading to thin liquidity conditions and more pronounced price reactions among asset classes.
Keep in mind that the U.S. currency is already on shaky footing, following last Friday’s disappointing NFP print and revived expectations of three Fed rate cuts this year.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie 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!Another batch of downbeat U.S. figures might be enough to spur an upside break from the area of interest on XAU/USD, as a move past the $2,350 level could clear the path for a rally to the next major resistance near $2,400 and R3.
The 100 SMA crossed above the 200 SMA, after all, so the path of least resistance is to the upside. Make sure you look out for potential selling action at the nearby R2 ($2,378.15) level as well.
The U.S. has its preliminary UoM consumer sentiment index coming up, so another dip in confidence might mean fresh downside for the dollar. Strong data, on the other hand, could lead XAU/USD to retreat back to support zones at the pivot point level ($2,308.66) or the range support.
Whichever direction you choose to trade, make sure you’re sticking to your risk management plan and that you’re keeping close tabs on any headlines that may impact gold price action!
