FX.co ★ The End | XAU/USD, GOLD

Gold is advancing towards key resistance levels Gold jumped to a session high of $2,655 on Wednesday and continued to rally against the trend. The day marked a higher high and a higher low, with prices closing in the upper third of the trading range. While the daily low was $2,619, gold is now approaching a zone of potential resistance near the 50-day moving average (MA) at $2,659 and the 50% Fibonacci retracement just above the $2,662 level. Power is building, but resistance is looming The rally showed strength by moving above the internal bull line, a key technical milestone. A definitive close above this line would further confirm the dynamics. However, the 20-day MA at $2,680 is close to the 50-day MA and forms a potential resistance cluster. Beyond the 50% retracement, the price range between $2,680 and $2,692 becomes critical. This area includes the 20-day MA at $2,680, the September high at $2,686, and the 61.8% Fibonacci retracement at $2,692. Recovery Faces Tests Despite continued gains, gold's upward path may encounter resistance at earlier support levels that were breached during last week's decline. Testing these areas is a common behavior in technical analysis that often leads to bearish reversals or pullbacks. A significant bearish reversal could even lead to a retest of recent lows. The daily low of $2,619 is currently acting as short-term support. A break below this level would break the pattern of higher highs and higher lows, signaling potential downside risks or a temporary consolidation before another upside attempt. The weekly trend is holding firm On the weekly chart, gold continues to hold close to the 20-week MA, a critical trend indicator that has provided strong support since October 2023. While the recovery looks promising, the market's next move depends on gold breaking through key resistance zones higher, which will determine whether the rally can sustain or slow down.