Gold Eyes Breakout from Ascending Channel Toward $3,500📈 Chart Analysis
1. Rising Channel Structure
Gold (XAU/USD) has been trading within an upward-sloping channel, marked by the blue trendlines connecting interior lows and highs, culminating at point C (~$3,497). The latest bounce off the lower channel near “B” reinforces bullish bias – if this trendline holds, another leg higher toward resistance around $3,497–$3,500 is likely.
2. Support & Resistance Confluence
The purple trendline and the dotted horizontal green level (~$3,498) converge near the projected breakout point. This synergy provides a strong pivot zone — a successful breakout would validate targets near channel highs.
3. Harmonic Pattern in Play
The chart displays a bullish harmonic structure (likely a Bat or Gartley formation), with retracement ratios (0.719, 1.627) anchoring reversal areas. These reinforce the bounce at B and the potential move toward point C.
4. Trade Scenarios
Bullish Scenario (primary): A bounce off the trendline triggers a rally to the channel top and resistance zone ($3,497–$3,500).
Bearish Caution: A drop below the trendline invalidates the pattern, potentially bringing prices back to horizontal support around $3,296 or even $3,120, as indicated at point A.
🛠️ Technical & Market Context
Technicals: Daily trend remains bullish as long as price holds above ~$3,340–$3,350, with resistance forming in the $3,380–$3,400 range
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Fundamentals: Geopolitical tension (e.g., Middle East conflict) and safe-haven inflows continue to underpin gold — though Citi expects prices to eventually correct toward $3,300–$3,500 mid‑term
Sentiment: Some analysts advocate “selling the rallies,” especially into the $3,450–$3,500 zone . But central banks’ ongoing buying and potential Fed rate cuts support a stronger floor
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✅ Trade Strategy
Scenario Entry Zone Target Stop Loss Placement
Play the Bounce ~$3,350–$3,360 $3,497–$3,500 Below trendline near B zone (~$3,320)
Breakout Trade On momentum above $3,400 $3,497–$3,550 Below breakout (sub-$3,380)
Bearish Trigger Break & close below trendline Back to $3,296 / 3,120 Just above trendline ($3,360)
🔍 Summary
Gold remains in a structurally bullish setup inside an ascending channel. The confluence of harmonic reversal, strong trendline support, and pending fundamental catalysts presents a high-probability opportunity to push toward the $3,500 area—provided the trendline and $3,340–$3,350 support hold. A drop below would invalidate the bullish outlook and favor deeper retracement.
