Gold (XAUUSD) has recently completed a textbook falling wedge breakout, confirming a powerful bullish reversal setup on the higher timeframes. This pattern, known for its strong trend-continuation potential, has played out beautifully. After a period of consolidation and lower highs, price has decisively broken above wedge resistance and is now pushing higher with strong bullish momentum. We've already captured significant profit from the breakout zone, and price action suggests another wave to the upside is imminent.
Fundamentally, gold continues to benefit from growing geopolitical tensions, elevated inflation concerns, and central bank reserve accumulation. With the Federal Reserve leaning cautiously dovish due to signs of a softening labor market and cooling inflation, real yields are under pressure. This is supportive for gold, especially as markets begin to price in potential rate cuts before year-end. The weakening US dollar and stable treasury yields are reinforcing demand for precious metals, particularly among institutional investors seeking safety and hedge assets.
Technically, gold has broken its bearish structure and is forming a new bullish leg, supported by strong volume and RSI divergence at the lows. The breakout from the falling wedge pattern has opened up upside targets toward recent swing highs and potentially even all-time highs if macro conditions remain favorable. With price now above key moving averages and consolidating above the wedge breakout zone, the technical bias is clearly bullish.
This move aligns well with seasonality and macro risk flows. As risk-off sentiment slowly builds and inflation risks remain unresolved globally, gold is regaining its status as a premier safe-haven asset. Expecting continued follow-through in the coming weeks, with clean structure and fundamentals favoring bulls, this setup remains a high-probability opportunity to ride the next impulsive bullish leg.
Fundamentally, gold continues to benefit from growing geopolitical tensions, elevated inflation concerns, and central bank reserve accumulation. With the Federal Reserve leaning cautiously dovish due to signs of a softening labor market and cooling inflation, real yields are under pressure. This is supportive for gold, especially as markets begin to price in potential rate cuts before year-end. The weakening US dollar and stable treasury yields are reinforcing demand for precious metals, particularly among institutional investors seeking safety and hedge assets.
Technically, gold has broken its bearish structure and is forming a new bullish leg, supported by strong volume and RSI divergence at the lows. The breakout from the falling wedge pattern has opened up upside targets toward recent swing highs and potentially even all-time highs if macro conditions remain favorable. With price now above key moving averages and consolidating above the wedge breakout zone, the technical bias is clearly bullish.
This move aligns well with seasonality and macro risk flows. As risk-off sentiment slowly builds and inflation risks remain unresolved globally, gold is regaining its status as a premier safe-haven asset. Expecting continued follow-through in the coming weeks, with clean structure and fundamentals favoring bulls, this setup remains a high-probability opportunity to ride the next impulsive bullish leg.
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Join our Forex Community Telegram group and connect with thousands of traders.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.