FX.co ★ XAU/USD, GOLD

XAUUSD 1-D Time Frame Update Despite not moving much over the past two days, gold is still nestled close to the most recent high of $5,250, which indicates that buying pressure is still present. It formed a modest pennant on Wednesday, consolidating within Tuesdays range and a three-day range. As it tries to break over the $5,141 mark, it forms close to the support of the 61.8% Fibonacci retracement. Interestingly, there hasnt been a retreat to test the previous short-term resistance level as support since Fridays emphatic regain of the 10-day and 20-day moving averages above $5,011. This indicator demonstrates that purchasers are still in charge. At the breakout, the averages were nearly on top of one another, which increased the price areas potential significance. It would be typical to pull back in order to test previous resistance as support. The three-day low, however, is at $5,091, which is just barely within Fridays range. That indicates short-term strength and raises the possibility of an upside continuation prior to a more significant reversal. Despite the information provided by the moving averages, gold is not trending and is currently in a consolidation period. This implies that they shouldnt always be given the same weight as in a market that is trending. Gold broke above a three-week high of $5,119 this week on the weekly timeframe, and a weekly closing above that level will confirm the breakout. The fact that the previous two-week periods concluded at record weekly closing highs is particularly noteworthy and indicates underlying demand strength. If the 78.6% upside target is met, demand will need to be reevaluated even though this indicates a robust recovery following a 21.4% loss.