Gold (XAU/USD) Analysis: Positive Momentum Signals Bullish Breakout Ahead
In the past month, Gold (XAU/USD) has been trading within a tight range below the key intermediate resistance level of US$2,532. However, recent positive momentum readings and a major bearish breakdown in the 10-year US Treasury real yield could potentially trigger a bullish breakout for Gold.
Key support for Gold is currently at US$2,435, which will be crucial to watch in the coming days. This analysis follows up on our previous report titled “Gold Technical: The recent sell-off may have reached a potential bullish reversal level at US$2,353” published on 26 July 2024.
Since our last publication, Gold has rebounded above the bullish reversal level of US$2,353 and reached a fresh all-time high of US$2,352 on 20 August. With the upcoming release of key US inflation data, the core inflation rate for August is expected to show signs of a deceleration trend, potentially supporting Gold prices.
Technical analysis indicates that the 10-year US Treasury real yield has experienced a major bearish breakdown, reducing the opportunity cost of holding Gold. This, coupled with positive medium-term momentum for Gold, suggests a potential bullish breakout ahead. A clearance above US$2,532 could see Gold reaching the next resistance zone at US$2,640/715.
Overall, the current market conditions indicate a positive outlook for Gold (XAU/USD), with potential for a bullish breakout in the near future. Watch key support at US$2,435 for confirmation of this bullish scenario.