**Gold Price Action Analysis: Pullback and Continuation**
*Adapted and expanded from an article originally written by Nenad Kerkez for FXStreet*
Gold markets have witnessed complex price action in recent weeks, with a blend of bullish momentum and corrective movements. In this analysis, we delve into the technical landscape of gold (XAU/USD), focusing on the recent pullback from highs and evaluating whether the bullish trend will persist. This expanded look at the original FXStreet analysis by Nenad Kerkez offers a more comprehensive breakdown, examining price patterns, key support and resistance zones, trend continuation signals, and potential trading setups.
## Overview of Gold Price Movement
Gold has experienced an extended bullish rally supported by macroeconomic uncertainties, central bank policies, and inflationary pressures. It has historically functioned as a safe-haven asset during periods of market turbulence, and recent geopolitical tensions and U.S. monetary policy concerns have helped fuel the surge.
However, like all assets, gold does not move in a straight line. Price corrections, consolidation phases, and short-term reversals are all natural occurrences, even within strongly trending markets. The current price structure suggests such a pullback may be a healthy part of a broader continuation pattern.
## Key Points in the Current Technical Landscape
The following are the major elements affecting the short- and mid-term trajectory of gold prices:
– **Upward Momentum and Resistance Breakout**: The bullish trend remains intact after gold breached multiple resistance levels over recent months.
– **Emerging Pullback**: A measured pullback has started to form on shorter timeframes. This does not yet threaten the overall uptrend but must be monitored closely.
– **Support Testing**: Prices are currently approaching strong support levels that may act as a launch pad for a continuation to the upside.
– **Bulls Awaiting Confirmation**: The next bullish impulse depends on whether current support levels hold and whether price action confirms continuation.
## Technical Analysis of Gold (XAU/USD)
The core of this analysis involves reviewing the technical indicators, candle structures, Fibonacci retracement levels, and key zones that are significant for traders monitoring the market.
### Trend Structure and Market Phases
At the time of analysis, gold had been in an overall bullish trend. This trend is defined by a series of higher highs and higher lows, and the price structure remains bullish on higher timeframes such as the daily and 4-hour charts.
– **Higher Highs and Higher Lows**: Gold’s movement is characterized by sustained upward legs followed by limited corrections.
– **Short-Term Correction**: Recent price action shows gold pulling back from local highs, indicating that a short-term distribution or retracement phase is underway.
– **Channel Formation**: A rising price channel is visible on intraday charts, where price oscillates between ascending support and resistance trendlines.
### Important Price Levels
Key support and resistance zones are essential for identifying opportunities and managing risk.
– **Immediate Resistance Zone**: The 2025-2035 region has acted as a cap on upward momentum on the H1 and H4 timeframe charts.
– **Support Zone**: The pullback has brought gold towards a support area near 1980-1990, a prior demand zone where buying interest previously emerged.
– **Fibonacci Retracement**: Applying Fibonacci from recent swing low to high, the 50 percent retracement level aligns closely with the current support zone, adding confluence for bullish continuation.
### Candlestick Patterns and Price Action Clues
– **Rejection Wicks**: Several candles in recent trading sessions show long lower wicks, suggesting buying interest emerging from the current support zone.
– **Bearish Engulfing**: A short-lived bearish engulfing pattern emerged during the recent top formation, indicating temporary exhaustion among buyers.
– **Doji Candles**: Occasional doji and pinbar formations near support highlight hesitation from the market to break lower.
## Intraday Trading Perspective
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