Following on from the latest ‘Technical Take’ for spot gold (XAU/USD), you will note that price did indeed run through short-term stops below the higher low at US$2,485 formed on 19 August on the H1 timeframe and tested the combination of support at US$2,477 and trendline support, taken from the low of US$2,381. Price has since rallied from a low of US$2,470 to a high of US$2,526.

Moving forward, the yellow metal remains on the doorstep of all-time highs, boasting an unmistakable uptrend. However, one thing traders (and investors) tend to sidestep is entering long at record peaks. Market participants frequently wait for a dip (a correction) to form and attempt to fade the move at support.

Long-Term Uptrend

The weekly timeframe reveals that recent price movement has made use of a breached channel resistance-turned-support line since April 2024, extended from the high of US$2,078. For that reason, any meaningful bout of profit-taking could see the precious metal withdraw from current levels and retest the ascending barrier, which happens to share space with local support coming in at US$2,433. The Relative Strength Index (RSI) shows negative divergence within overbought territory and supports a correction at current prices.

H4 Channel Support

Meanwhile, on the H4 timeframe, we have seen price rise within the limits of a steep ascending channel, extended from a low of US$2,381 and a high of US$2,476. Buyers and sellers are currently squaring off at channel support. Breaching this ascending base could unshackle downside towards familiar support at US$2,477. However, since this level was already tested last week, it could be vulnerable to break. Space south of this support shines the technical headlight on support at US$2,438.

All about M15 Support and Resistance

Finally, on the M15 chart, price is trading between support at US$2,503 and resistance from US$2,519. Notably, resistance has already been tested and, therefore, could be vulnerable to the upside. M15 support, therefore, could be one to watch, having seen the level positioned just beneath the ‘double-bottom’ lows of US$2,503ish.

Seeing how M15 resistance may be weak and short-term traders likely positioning stops just beneath the US$2,503 lows (traders look to take advantage of sell-stops beneath these types of lows), together with H4 action testing channel support, and the long-term trend favouring buying, a test of the noted M15 support could be seen to challenge the mettle of US$2,519 and potentially beyond.

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