Gold (XAU/USD) Price Forecast: $4,180 High Challenges Channel Resistance

Bulls Drive to Record Levels

Gold advanced to a new record high of $4,180 on Tuesday before pausing its ascent, maintaining position in the upper half of the day’s range above $4,135 at the time of writing. A closing price above Monday’s high of $4,117 appears probable, confirming the latest bull trend peak. This extends a substantial $912 (28%) rally from the late-July swing low of $3,268, highlighting sustained buyer interest in the precious metal.

Resistance and Momentum Indicators

The day’s high aligned precisely with the upper parallel trendline of a long-term rising channel, with the lower channel line connecting the September 2018 swing low and the upper parallel touching the July 2011 swing high. This alignment suggests the market recognizes the line as potential dynamic resistance. But what happens next will be key.

The Relative Strength Index (RSI) reflects overbought conditions, approaching extreme levels, which could preclude consolidation or retracement. Monday’s breakout above a near-term rising channel, following consolidation near its upper boundary, demonstrates robust momentum. Yesterday’s wide-range green candle and close near the high reinforce this bullish behavior, though such trend extensions carry the risk of a blow-off top.

Support Levels and Potential Weakness

Should the top channel line assert resistance, an initial sign of weakness would emerge on a decline below today’s low of $4,090. The 10-day moving average at $3,983 serves as key near-term support, consistently effective since its reclaim on August 22. This level warrants monitoring for signs of buyer defense on approach. A decisive break below $3,983 would target the 20-day average at $3,870, indicating a deeper pullback.

Upside Considerations

A confirmed breakout above $4,180 would position gold for higher targets, though the rising nature of the top channel line means prices could advance further while remaining near or below resistance. The overall structure supports continued upside potential until confirmed weakness appears. Today’s close will provide clarity on momentum sustainability, with the 10-day average as a critical benchmark for the trend’s health.

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