Last week witnessed a shift in control within the gold market (XAU/USD) as buyers strengthened their position, pushing prices up by +2.5% and breaking a two-week losing streak, approaching the all-time highs of $2,431.
Technical indicators continue to favor buyers, particularly evident on the daily timeframe where support held firm around $2,280. This level was closely monitored by the Research Team and has proven to be a pivotal area for potential dip-buying opportunities as trend followers seek to enter the market from key support levels.
The support at $2,280 was reinforced by a 1.618% Fibonacci projection ratio at $2,293, aligning with the ‘alternate’ or ‘extended’ AB=CD formation recognized within the Harmonic trading community. Following this, gold prices surged beyond the 38.2% Fibonacci retracement level at $2,336, ending the week at $2,371, which corresponds to the 61.8% Fibonacci retracement ratio. These Fibonacci levels, derived from the AB=CD structure, typically serve as upside targets for Harmonic traders.
Considering the completion of the AB=CD structure and the clear uptrend in the gold market across various trend identification tools, the current scenario remains favorable for buyers. Additionally, the daily chart’s Relative Strength Index (RSI) bounced back from the 50.00 centerline and trendline support, indicating underlying strength in the market. It’s worth noting that although the weekly chart’s RSI retreated from overbought levels seen in mid-2020, this indicator can remain overbought for extended periods during strong trends.
Looking ahead to this week, the broader market outlook suggests potential for further upward movement. On a shorter-term basis (H1 timeframe), nearby demand zones between $2,347 and $2,355 could act as a platform for buyers. If this support zone fails to hold, additional levels to watch include $2,326 and $2,344 as potential areas where buyers might reassert control.
The overall sentiment in the gold market remains bullish, supported by technical indicators and ongoing interest in safe-haven assets amidst geopolitical tensions and economic uncertainties.
