Gold’s longer-term uptrend is looking pretty steady, but the precious metal is hitting a ceiling at a new downtrend channel forming.

Will it retreat again?

Take a look at these near-term inflection points I’m watching on the 4-hour time frame:

Gold bounced off its long-term rising trend line support earlier this month while markets remain wary of global trade tensions and geopolitical risks.

However, price has been forming lower highs and lower lows since mid-April, suggesting weakening upside momentum. XAU/USD is hovering at the top of a descending channel formation around R1 ($3,312.91) and might be in for another dip.

Or can it sustain its current rally past this level?

Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on gold and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

The 100 SMA is above the 200 SMA on this time frame, but the gap between the moving averages has narrowed enough to hint at a possible bearish crossover.

If this materializes, look out for a bounce off the channel top that could be followed by a pullback to nearby support areas at the dynamic support around the SMAs, the pivot point level ($3,216.86) then the long-term uptrend line near the $3,200 major psychological mark.

A surge in upside momentum past the channel top, on the other hand, could clear the way for a gold rally to the next bullish targets at R2 ($3,421.93) then R3 ($3,517.59) close to the all-time highs.

Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!

Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.