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Gold rallies after technical breakout, eyes $4,500 resistance
Gold has risen 6.5% since the start of the week and is now testing a prior resistance zone near $4,500 ahead of US CPI and PPI.
Gold has signaled an end to its February-to-date downtrend after confirming a major technical breakout, with the metal rebounding from the $4,000 psychological level and the 61.8% retracement of the 2022 to 2026 rally, according to Action Forex.
The move also comes alongside strength relative to key moving averages, as gold broke above the 50-day moving average earlier this week. The outlet notes that if the breakout is not false, the 50-day average could turn back into support for the medium-term bullish trend.
On the weekly chart, however, Action Forex says bulls still need to do more work because gold approached but did not break the 50-week moving average, which it estimates near $4,400. It adds that another resistance area sits around $4,500, a zone that previously reversed the trend in December and March.
Looking ahead, the outlet expects a more volatile stretch this coming week, with the battle likely intensifying after the release of US CPI and PPI data. It suggests the path to $4,500 could be relatively easier than the pullback risk beyond that level.
Latest closeGold $4,292.00 ▲1.1%