Chart: Fresh Triangle Pattern on Gold (XAU/USD)

Check out this new consolidation pattern on the golden 4 hour time frame!

Can the sideways price action continue or are we about to see a breakout soon?

Here are the nearby inflection points I’m watching closely:

Gold (XAU/USD) 4 Hour Chart from TradingView

The precious metal formed higher lows since last month and peaked around $2,475, creating an ascending triangle chart pattern.

Gold appears to be pulling back from triangle resistance again, potentially refocusing its eyes on support near the pivot point ($2,418.17) and moving averages. The 100 SMA is above the 200 SMA to indicate that the support is more likely to hold than break.

Or are we about to see another bullish breakout?

Remember that directional biases and market price volatility conditions are usually driven by fundamentals. If you haven’t done your homework on gold and market sentiment yet, then it’s time to check the economic calendar and catch up on the daily fundamental news!

Earlier this week, the US economy posted mostly lower inflation readings as the producer price index and annual CPI missed market estimates. For many, this could mean a greater chance of further Fed interest rate cuts, which would likely be a plus for overall economic growth later on.

As a result, demand for commodities could increase, as could investor appetite for risk assets such as gold. Conversely, the safe US dollar could suffer a downside, possibly lifting XAU/USD above the top of its triangle.

Watch for a move above R1 ($2,471.96) as this could pave the way for a test of the next upward barrier at R2 ($2,512.66) or even a longer-term rally that is at the same height as the formation of the triangle.