Earlier this month, spot gold (XAU/USD) found itself under pressure after reaching the $2,700 mark. However, buyers regrouped at a crucial support zone, increasing the likelihood that the precious metal could continue its upward trend in 2025.
When examining the 4-hour chart, have you noticed the same pattern we have?
Gold (XAU/USD) 4-hour Chart by TradingView
In case you didn’t catch it, Friday’s robust U.S. jobs report has reinforced expectations that the Federal Reserve might maintain higher interest rates for an extended period. Consequently, U.S. bond yields and the dollar are on the rise, adding pressure on gold. Despite continuing support from global economic concerns and geopolitical risks, the allure of U.S. bonds and a stronger dollar has somewhat reduced the demand for gold.
Don’t forget, market price dynamics and volatility often stem from fundamental drivers. If your research on gold and the U.S. dollar is still pending, it’s high time you peruse the economic calendar to stay informed about the daily fundamental news.
If you take a closer look, you’ll see that XAU/USD fell to around $2,660 after peaking at $2,700, drawing in buyers. This level is noteworthy as it aligns with the 50% Fibonacci retracement of the recent upswing in gold prices, the Pivot Point on the 4-hour chart, and represents a mid-range support that’s been significant since November 2024.
Should the buying momentum persist and trading remains above $2,660, XAU/USD could make another attempt at the $2,700 mark. Furthermore, any weakening of the U.S. dollar or escalation in global growth concerns could propel gold closer to its $2,720 highs seen in November and December.
On the downside, however, there’s potential for further decline. If the dollar gains strength or the risk sentiment improves, XAU/USD might slide below the $2,650 psychological barrier, bringing lower levels like $2,640 or even $2,610 into focus.
Regardless of your trading stance, it’s crucial to employ sound risk management strategies and remain vigilant about key catalysts that could sway overall market sentiment.
