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Gold Breaks Above the $4,100 Level, Bullish Momentum Recovers but Faces Key Resistance
Summary:
On Monday, gold prices opened sharply higher and broke above the psychological $4,100 level, rising approximately 1.8% during the Asian trading session. However, gold failed to extend its gains further, with market sentiment turning increasingly cautious. Currently, investors are closely monitoring this week’s Federal Reserve Open Market Committee (FOMC) meeting while remaining alert to the possibility of renewed escalation in the US-Iran situation. Although short-term safe-haven demand has eased, the direction of the US dollar, the Federal Reserve’s policy outlook, and changes in geopolitical risks will remain key factors influencing gold’s future trend.
Buy
TradingXAUUSD
EXP
4089.16
Entry Price
4398.00
TP
3950.00
SL
4014.78 -13.64 -0.34%
0
Point
Flat
3950.00
SL
CLOSING
4089.16
Entry Price
4398.00
TP
Fundamental
On Monday, gold prices surged after the market open, breaking above the $4,100 level, mainly supported by rising expectations of a potential shift in the Federal Reserve’s policy stance and a weaker US dollar.
Over the weekend, the US-Iran conflict showed signs of temporary de-escalation, reducing concerns over further escalation in the Middle East and creating room for potential diplomatic negotiations. The decline in geopolitical tensions has, to some extent, eased market concerns over rising energy prices and renewed global inflation pressures, while also reducing expectations that the Federal Reserve may continue tightening monetary policy in the coming months.
However, the market remains cautious. On one hand, the US-Iran situation remains vulnerable to renewed tensions, which could revive safe-haven demand. On the other hand, this week’s Federal Reserve meeting will serve as a crucial reference point for assessing the future interest-rate path, and any hawkish signals could limit gold’s short-term upside potential.
Therefore, the current rise in gold prices appears to be more of a recovery rally following the previous sharp decline. The next stage of the trend will depend on further confirmation from both macroeconomic factors and technical structures.
Technical Analysis
From a technical perspective, gold’s market structure has improved significantly since prices broke above the previously established downward trendline last week. Recently, gold has formed a series of higher lows and higher highs, suggesting that the previous downward trend is gradually losing momentum and that prices have entered a stabilization and recovery phase.
In terms of momentum indicators, the RSI is currently hovering around the 50 level, indicating a relatively balanced struggle between bulls and bears. Meanwhile, the MACD indicator has stabilized and turned positive, suggesting that short-term bullish momentum is gradually recovering.
However, it is important to note that gold has not yet completely escaped the influence of the medium- to long-term bearish trend. Prices remain constrained by longer-term moving averages, and until the second key resistance zone is decisively broken, the current upward move should still be viewed more as a technical rebound rather than confirmation of a new long-term bullish trend.
If gold successfully breaks through the key resistance area and closes above it on the daily chart, market sentiment would improve further, potentially opening the door for a more sustainable advance. Conversely, before a confirmed breakout occurs, any upside movement may still be considered a corrective rebound within the previous downtrend.
Overall, we believe gold retains further short-term rebound potential, but bulls need to continue overcoming key resistance levels to confirm a broader trend reversal.
This strategy is based on the current market structure, technical indicators, and macroeconomic environment. If the Federal Reserve delivers a more hawkish policy signal, or if geopolitical risks ease rapidly and reduce safe-haven demand, gold’s upward momentum may face pressure. Traders should maintain strict risk management and closely monitor breakouts around key support and resistance levels.
Trading Strategy
Trading Direction: Buy
Entry Price: 4065
Target Price: 4398
Stop Loss: 3950
Strategy Valid Until: August 26, 2026, 23:55
Support Levels:4065,4048,4042
Resistance Levels:4136,4142,4166
Risk Warnings and Investment Disclaimers
You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.
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