- Gold rebounds massively from the lows traded in November.
- A break above the 100 SMA on the 4-hour chart will help validate the expected spike to 1,875.
Gold’s price recently broke out of a descending wedge pattern. This breakout shifted the bulls’ focus upward after support at 1,760. Several resistance levels delayed the recovery, including the 50 Simple Moving Average on the 4-hour chart.
The precious metal hit wall at the 100 SMA on Friday. However, the price closed the week at 1,836, while its immediate downside is protected at 1,825. Gold’s bullish outlook will be validated; if the price closes the day above the 100 SMA.
On the upside, price action above the 200 SMA will place XAU/USD in an upward trajectory, perhaps to November highs around 1,966.
XAU/USD 4-hour chart
It is worth noting that a bearish narrative will come into the picture if the price dived under the 50 SMA. Various support levels are expected to absorb some of the selling pressure, including 1,800, 1,775, and November’s key anchor at 1,760.
Credit: FX Street