Gold Ascending Triangle Breakout – What’s a Good Level to Buy?
Arslan Butt • 1 min read
On Friday, the precious metal gold plunged over 1% in the wake of a stronger dollar. Investors also started taking profits in gold after prices temporarily exceeded $1,450 to hit a six-year peak on dovish signs from the US Federal Reserve and it is still on course for the second week of gains.
On the violation of an ascending triangle pattern and a resistance level of around $1,427, the prices mounted over 3% to cross above $1,450 level. Whereas, the increased expectations for a rate cut by the Fed at its month-end meeting added fuel to fire and triggered sharp buying in gold.
GOLD also gained support over the safe-haven appeal triggered by the conflict between the US and Iran. The United States announced that its Navy had destroyed an Iranian drone in the Strait of Hormuz, whereas Iran stated all its drones had returned to base cautiously and there was no sign of major escalation in the Gulf.
Speaking about the technical side, gold has already completed 50% Fibonacci retracement at $1,426 and it may head towards the next support area of around $1,420. That can be a trading level where we may see bulls taking an entry.
Looking at the 4-hour chart, the 50 and 100 period moving averages are supporting the precious metal around $1,411. The RSI and Stochastic still hold in the buying zone, which is another signal demonstrating bullish bias among traders.
XAU/USD – Technical Outlook
Key Trading Level: 1426.17
Gold – XAU/USD – Trade Idea
Fellas, I will be looking to stay bearish below $1,432 and bullish above $1,420.