Free Forex Signals

• Gold maintains a moderate bid tone but is struggling to extend gains beyond $5,000.
• Rising bets of Fed rate cuts are underpinning precious metals’ recent gains.
• XAU/USD might be in the C-D leg of a harmonic pattern aiming for $5,340.

Gold (XAU/USD) appreciates for the second consecutive month on Monday, favoured by moderate US Dollar (USD) weakness. The yellow metal maintains the immediate bullish trend intact, but so far, is failing to find significant acceptance above the $5,000 psychhological level. Downside attempts, however, remain limited to above $4,960.

The US Dollar Index, which measures the USD against a basket of six majors, has accelerated its reversal from last week’s highs, and this keeps Gold from falling further. Employment data released in the US last week suggests that markets might have underestimated the downside risks for the labour market, and has brought Federal Reserve rate cuts back to the table.

Technical Analysis: Potential harmonic pattern targeting the $5,340 area

The 4-hour chart shows XAU/USD’s near-term upside trend supported above the upward-trending 100-period SMA, now standing around $4,950. The Moving Average Convergence Divergence (MACD) histogram remains positive, although narrowing, and the Relative Strength Index (RSI) is above 50, reinforcing the improving momentum backdrop.

The positive indicators endorse the idea of a Gartley pattern in progress, aiming past the February 4 high, in the $5,100 area, towards the 78.6% Fibonacci retracement of the late January selloff, in the $5,340 area, or the January 29 high, at the $5,450 area.

Immediate support is at the mentioned 100-period SMA. A confirmation below Friday’s low, at $4,655 invalidates this view and exposes February’s bottom, near $4,400.