It looks like gold is back in correction mode!
Could this be an opportunity for more bulls to hop in and sustain the uptrend to new highs?
Take a look at these pullback areas on the 4-hour time frame:
Gold (XAU/USD) 4-hour Chart by TradingView
After striking one record high after another, the precious metal appears to be taking a break from its climb as profit-taking may be coming in play.
Safe-haven demand also seems to be fading while global trade developments are looking positive and market watchers are welcoming the possibility of additional stimulus as well.
Are these Fibonacci retracement levels about to attract more buyers?
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!
The precious metal is hovering above R2 ($3,754.09) but could still dip to the 38.2% Fib closer to R1 ($3,719.53) that could serve as the first line of defense among gold bugs.
A larger correction could reach the 50% Fib at $3,711.74 or the 61.8% level that lines up with a former resistance area and the longer-term rising trend line connecting the lows since August.
Keep your eyes peeled for reversal candlesticks at these levels since another run higher could spur a test of the swing high near R3 ($3,800.62) and a major psychological level, possibly even leading to a rally to new all-time highs at R4 ($3,847.16) and beyond.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
