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Gold stays weak amid receding safe-haven demand

Gold remains on the defensive below the $4,200 mark through the early European session on Thursday, though it lacks bearish conviction and holds above the weekly swing low. The US Dollar attempts a modest recovery from its lowest level since late October, touched on Wednesday, and acts as a headwind for the commodity.

The Technical Landscape

Looking at the weekly chart, XAU/USD has formed a classic cup and handle pattern, a bullish continuation signal that typically precedes significant price expansion. The neckline at $1,900 has been tested multiple times, and the recent breakout suggests strong institutional buying pressure.

"The market is pricing in a dovish pivot faster than anticipated. If the Fed pauses, gold doesn't just walk-it runs.

— CHIEF MARKET STRATEGIST

However, traders should remain cautious of short-term pullbacks. The RSI on the daily timeframe is approaching overbought territory (70+), which historically precedes a consolidation phase.

XAU/USD Technical Overview

In the daily chart, the 21-day Simple Moving Average (SMA) climbs above the 50-, 100-, and 200-day SMAs, with all slopes rising and price holding above them, reinforcing a bullish bias. The 21-day SMA at $4,147.93 offers nearby dynamic support, while the

50-day SMA at $4,084.46 underpins the advance. The Relative Strength Index (RSI) sits at 61.33, edging higher from 60.31 and signaling firm, but not overbought, momentum. Measured from the $4,381.17 high to the $3,885.84 low, the 61.8% retracement at $4,191.95 has been surpassed, hinting the prior bearish phase is losing strength.

Upside extension faces resistance at the 78.6% retracement at $4,275.16; a decisive close above this barrier would open the path toward the prior top. If buyers fail to sustain above the 61.8% marker, a pullback could revisit the 50% retracement at $4,133.50.

Beneath that, trend support remains defined by rising moving averages, with the 50-day SMA cushioning the downside. Overall, momentum and trend alignment favor dips being bought while Fibonacci thresholds frame the next directional cues.

Fundamental Overview

A generally positive tone around the equity markets turns out to be another factor undermining the safe-haven precious metal.

Any meaningful USD appreciation, however, seems elusive on the back of the growing acceptance that the US Federal Reserve (Fed) will lower borrowing costs again next week, which offers some support to the non-yielding Gold. Moreover, geopolitical uncertainties stemming from the protracted Russia-Ukraine war might contribute to limiting downside for the XAU/USD pair. Traders might also opt to wait for the crucial US inflation data on Friday

before placing fresh directional bets.

Key Fundamental Drivers

Federal Reserve Interest Rate Policy expectations

Central Bank Gold Accumulation (Record highs in 2024)

Geopolitical tensions in Eastern Europe

Weakening US Dollar Index (DXY)

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Get Signals Access
Level
Classic Fibonacci
R3
4205.89
4203.88
R2
4203.88
4201.88
R1
4200.65
4200.64
Pivot Point
4198.64
4198.64
S1
4195.41
4196.64
S2
4193.40
4195.40
S3
4190.17
4193.40
Level
.
R3
.
R2
.
R1
.
Pivot Point
.
S1
.
S2
.
S3
.
Classic
Fibonacci
4205.89
4203.88
4203.88
4201.88
4200.65
4200.64
4198.64
4198.64
4195.41
4196.64
4193.40
4195.40
4190.17
4193.40

Executive Summary

Gold has broken key resistance at $1,900, signaling bullish continuation.

Gold has broken key resistance at $1,900, signaling bullish continuation.

Institutignal accumulation is evident in the volume profile.

Watch for a retest of $1,910 support before entering long positions.

MQL5 Algo Trading Community

James Sterling

Senior Market Analyst at Forexpediaa

James is a Chartered Market Technician (CMT) with over 15 years of experience trading G10 currencies and commodities. Formerly at Goldman Sachs, he now leads the technical analysis division at Forexpediaa.

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Discussion

ORGANIZATIONS THAT INFLUENCE XAU/USD

 â€˘ WGC (World Gold Council) is the market development organization for the Gold industry. Its aim is to stimulate and sustain demand for the precious metal.

• LBMA (London Bullion Market Association) is an organization whose members participate in this wholesale over-the-counter market for trading Gold and Silver. It is loosely overseen by the Bank of England. Most LBMA members are major international banks, bullion dealers, and refiners.

• COMEX (Commodity Exchange) is the primary market for trading metals. The COMEX merged with the New York Mercantile Exchange (NYMEX) in 1994 and joined the CME Group in 2008.

• CGSE (Chinese Gold and Silver Exchange Society) is an organization of Gold trading firms in Hong Kong that are participants of the Chinese Gold and Silver Exchange, the first exchange in Hong Kong.

• Central banks like the Federal Reserve (Fed), the European Central Bank (ECB) or the People’s Bank of China (PBoC) significantly influence Gold prices through their monetary policies.