Chart: Potential Resistance Area Turned into Support for Gold (XAU/USD)

Spot gold looks poised to extend an uptrend as long wicks appear near a previous resistance zone.

In case you missed it, risk aversion was the name of the game yesterday as traders worried about global growth and the Fed may need more rate cuts to avoid a hard landing.

U.S. 10-year Treasury yields fell sharply, even as the safe-haven U.S. dollar held multi-day highs.

Gold (XAU/USD) 4 Hour Chart from TradingView

Spot gold, which fell from its all-time high of $2,525, dipped as low as $2,475 before returning to the $2,500 area.

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!

Will gold prices extend their multi-month uptrend this week?

Note that XAU/USD found support from the S2 ($2,473) Pivot Point area, which aligns with a major resistance level in late July and early August.

A few more bullish candlesticks and sustained trading above the S2 and S1 Pivot Point lines could set up XAU/USD for a possible bounce back from the 100 SMA of the 4-hour chart. And if there is enough momentum, the precious metal could return to its previous highs of $2,525.

But if this week’s themes push the US dollar higher, or if the previous resistance area fails to hold as support, XAU/USD could revisit lower interest areas. Gold prices may drop to $2,450 near the 200 SMA or the $2,440 levels closer to the long-term trend line support.

what do you think Which way will gold prices go in the next trading sessions?