Gold prices (XAU/USD) exhibited an upward trend on Tuesday during thin post-Christmas trading, registering a notable 0.7% gain to reach $2,065. This surge was underpinned by a retreat in the U.S. dollar, which edged closer to its lowest point since late July.
Following this advance, XAU/USD finds itself on the cusp of a pivotal resistance zone, spanning from $2,070 to $2,075. Historical patterns reveal previous challenges in sustaining breakthroughs at this level, prompting speculation of a potential repetition.
In the scenario of a bearish rejection from current levels, immediate support is identified at $2,050, with a more substantial floor at $2,010. Bulls are tasked with vigorously defending this support; any failure to do so may reignite downward momentum, setting the stage for a descent toward $1,990. Further weakness would shift focus to $1,975.
Conversely, if buyers successfully propel prices decisively above $2,070/$2,075, momentum for upward movement could intensify. This sets the stage for the precious metal to consolidate above $2,100. Continued strength may pave the way for a retest of the all-time high at $2,150.
As market participants return from the holiday hiatus, the interplay between critical support and resistance levels will likely define the short-term trajectory of gold prices. The potential for a breakthrough or a retreat hinges on market dynamics and the ability of both buyers and sellers to assert control over these crucial price levels. Investors will keenly observe these developments as gold navigates the final trading days of the year.
