Gold (XAU/USD) extended its bullish momentum on Tuesday, breaking out above a five-day high of $3,266 before peaking at $3,290. This marked a key technical milestone as it tested resistance at the 20-day moving average (MA), offering a strong signal that buyers have regained control of the market.
Intermediate Bull Trend Holds Firm
The latest price action confirms that gold’s intermediate bull trend remains intact. The metal bounced decisively off the 50-day moving average around $3,121 last Thursday, suggesting the recent bearish correction may have concluded. The 50-day MA continues to act as a reliable support zone, validating the strength of the ongoing uptrend as long as prices remain above it.
Technical Structure: Bullish Recovery from Pullback
Following the record high of $3,500 posted on April 22, gold formed a modest declining trend channel, characterized by a falling ABCD pattern. That pattern reached its projected downside target at $3,140 last week, establishing firm support around the 50-day line and the lower boundary of a larger rising trend channel.
This trendline was nearly touched during the recent pullback, before a sharp recovery suggested a successful support test. The correction appears to have concluded in line with technical expectations, positioning gold for a renewed move higher.
Key Resistance: 20-Day Moving Average
The 20-day MA, currently acting as near-term resistance, is a critical price zone to watch. Earlier in May, gold had bounced off this same moving average before staging a bullish rally. A sustained break above this level could set the stage for a move toward the upper boundary of the current declining trend channel.
Of particular importance is the convergence of technical indicators around $3,375:
Downtrend line resistance
Fibonacci 78.6% retracement level at $3,371
This price zone marks a key upside target. A decisive break above it could confirm continuation of the broader bullish trend.
Outlook: Momentum Favors Buyers
As of this writing, gold continues to trade near the highs of the day, and a fresh intraday high remains possible. If the momentum is maintained, and the metal remains above the 50-day MA, the outlook for further gains remains strong.
Summary of Key Levels
| Level | Support/Resistance | Significance |
|---|---|---|
| $3,121 | Support | 50-day MA, recent swing low |
| $3,140 | Support | ABCD pattern target |
| $3,266–$3,290 | Resistance (broken) | Short-term breakout zone |
| $3,375 | Resistance | Downtrend line + 78.6% Fibonacci retracement |
| $3,500 | Record high | All-time high posted on April 22 |
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