Gold (XAU/USD) has accelerated its recovery on Wednesday, favoured by a softer US Dollar as lower Oil prices and downbeat US macroeconomic data cooled market expectations of Federal Reserve (Fed) rate hikes on Tuesday.
This has enticed Gold buyers to push the precious metal above the top of a triangle pattern, at the $4,125 area, in a move that is still to be confirmed.
In this context, investors have cut back bets of a Fed rate hike in September to 58% from 67% on Tuesday, according to data by the CME’s Fed Watch Tool.
A bearish reaction, on the other hand, is likely to find support at the $4,000 psychological level, although the key support area lies at the $3,945 area, the bottom of the mentioned triangle.
A confirmation below here negates the bullish view and brings the late October 2025 lows, at $3,886, into play.
Gold (XAU/USD) has accelerated its recovery on Wednesday, favoured by a softer US Dollar as lower Oil prices and downbeat US macroeconomic data cooled market expectations of Federal Reserve (Fed) rate hikes on Tuesday. This has enticed Gold buyers to push the precious metal above the top of a triangle pattern, at the $4,125 area, in a move that is still to be confirmed.
Bullion is drawing support from lower US Treasury yields, following softer-than-expected US Job Openings and Factory Orders figures released on Tuesday. Meanwhile, the decline in Oil prices, with the US benchmark West Texas Intermediate (WTI) trading $10 below last week's highs, has eased concerns about the inflationary impact of energy prices. In this context, investors have cut back bets of a Fed rate hike in September to 58% from 67% on Tuesday, according to data by the CME’s Fed Watch Tool.
Technical Analysis: Gold needs to break $4,220 to confirm a deeper correction
XAU/USD trades at $4,161, holding a constructive near-term bias after reaching one-week highs above the top of a descending triangle. Momentum indicators in 4-hour charts endorse the positive view, with the Relative Strength Index (14) around 55 hinting at a building bullish while the Moving Average Convergence Divergence (MACD) slightly above zero strengthens the case for a moderate upside bias.
Bulls, however, will have to clear the horizontal barrier around $4,220 (June 22 highs) to confirm a bullish reversal and set sail for the mid-June highs, at $4,380.
A bearish reaction, on the other hand, is likely to find support at the $4,000 psychological level, although the key support area lies at the $3,945 area, the bottom of the mentioned triangle. A confirmation below here negates the bullish view and brings the late October 2025 lows, at $3,886, into play.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
