Gold Approaches $4,045, Momentum Still Weak
Gold (XAU/USD) is trading higher for the second consecutive day on Thursday, supported by a softer US Dollar. The precious metal has reclaimed the psychological $4,000 level and is now testing the upper boundary of its recent two-week range, trading near $4,045 at the time of writing.
The US Dollar Index (DXY) has pulled back from multi-month highs, as risk appetite improves and demand for safe-haven assets eases. However, downside in the greenback remains limited, as strong employment and services data released on Wednesday continue to cast doubt on the likelihood of imminent rate cuts by the Federal Reserve.
Technical indicators suggest that gold’s upward momentum remains fragile. On the 4-hour chart, the Relative Strength Index (RSI) is hovering just above the 50 level, while the Moving Average Convergence Divergence (MACD) is fluctuating around the signal line—indicating a lack of clear directional bias.
To confirm a bullish breakout, bulls must decisively breach the $4,045 resistance zone, which corresponds to the highs from October 29 and 31. A successful breakout would shift focus toward the $4,150 level (October 23 high), followed by the $4,220 zone, which acted as strong resistance on October 17, 19, and 20.
If gold fails to break above $4,045 and faces rejection, the price could retreat toward the $3,930 support area (October 30 and November 4 lows). A break below this level would expose the October 28 low near $3,890. Further downside could target the October 2 low at $3,820, which is just above the A-B=C-D measured move projection from the $4,370 peak, estimated near $3,795.
Gold is approaching a critical resistance level at $4,045, but technical signals suggest that bullish momentum is still weak. A breakout above this level could open the door to $4,150 and $4,220. However, failure to clear resistance may trigger a pullback toward $3,930 or even deeper levels. Traders are watching closely as the market weighs softening dollar sentiment against strong economic data from the United States.