FX.co ★ XAU/USD, GOLD

XAUUSD 1-H Time Frame Update After temporarily reaching a new record high of $3,707 on Wednesday, gold precipitated a one-day bearish reversal, dropping below Tuesday's low. Sharp market fluctuations were fuelled by the volatility that followed the Federal Reserve's rate decision and future guidance. Sellers had taken back control by the afternoon session, limiting trading to the lower third of the day's range. A bearish outside day would be confirmed by a close below $3,675, indicating a significant change in the short-term momentum. Even if gold set a new record on Tuesday, the market was already exhibiting indications of exhaustion, as evidenced by the breakout's limited range. Multiple technical indicators and earlier hesitancy around the $3,675 level establish a resistance zone that the price is still within. With just three short one-day declines, gold rose $396, or almost 12%, from the $3,311 swing low in late July. Up until recently, when there were two days of lower highs and lower lows, this indicated strong demand but also increased the possibility that the market was poised for a more thorough corrective phase. Gold has remained above its rising 8-day moving average, which is currently at $3,651, for most of its increase. Today's low of $3,646 was a successful test of that price range. Short-term weakness would be indicated by a clear closing below today's low, which would also indicate a break below the 8-day average. Additionally, as Monday's low also found support around the 8-day average, a drop through that day's low of $3,627 would provide additional bearish confirmation. Support levels to keep an eye on if sellers push their advantage are the 38.2% Fibonacci retracement at $3,557 and the low from last week at $3,576. The 20-day moving average, which is currently climbing around $3,532, can be the next dynamic support and line up with that retracement. However, upside targets reappear at $3,734 and a confluence zone between $3,782 and $3,812 if bulls recover control with a strong advance above Wednesday's high of $3,707 today.