Gold is showing signs of stabilization following a sharp decline, with traders now eyeing a potential rebound amid renewed optimism surrounding US-UK trade progress and upcoming US-China negotiations. The price action has found support near key Fibonacci levels, suggesting that buyers may be preparing to re-enter if bullish momentum is confirmed.
Key Market Dynamics
After falling to an intraday low of $3,274.38, gold rebounded on Friday as traders digested the implications of the US-UK “breakthrough deal”. The agreement, which maintains a 10% US tariff on British goods while the UK slashes its tariffs to 1.8% from 5.1%, is seen as a confidence booster for broader trade talks, especially with US-China discussions scheduled this weekend.
While the dollar remains strong, gold has attracted dip buyers, recovering toward the 50% Fibonacci retracement level at $3,327, which now serves as a key pivot area.
Technical Outlook: Fibonacci and Moving Averages
Gold is now sandwiched between critical technical levels:
Support Zone
$3,303 – 61.8% Fibonacci support
$3,268 – 78.6% Fibonacci retracement
Resistance Levels
$3,342 – 50-period EMA, initial breakout point
$3,352 – 38.2% Fib retracement, short-term target
$3,382 – Major resistance and potential breakout trigger
The 50-period EMA at $3,342 aligns closely with the 50% Fib retracement, making it a decisive level. A sustained move above it would signal a trend reversal and attract additional buying interest.
XAU/USD Trade Setup
Here’s a structured trading plan for bullish participants:
Buy Entry: Above $3,342 (confirmed breakout above 50 EMA)
Target 1: $3,352 (38.2% Fib)
Target 2: $3,382 (major resistance)
Stop Loss: Below $3,303 (61.8% Fib) to manage downside risk
A bullish MACD crossover would provide added confirmation for momentum traders, signaling a shift in trend strength and supporting a long position.
Outlook: Cautious Optimism
With geopolitical uncertainty still in play and the US-China talks on the horizon, gold remains vulnerable to sudden sentiment shifts. However, the technical structure suggests that buyers are watching $3,342 closely. A breakout above this level could accelerate a move toward $3,382, especially if trade talks deliver market-friendly signals.
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