Usman Salis
Gold (XAU) recent rally has captured market attention as prices approach the symbolic $4,000 per ounce threshold. While this round number will likely dominate headlines, experienced analysts point to a more critical technical zone just above it. The real test for the precious metal lies between $4,100 and $4,150, where long-term chart patterns suggest a major resistance area.
Chart Analysis Reveals Long-Term Uptrend
The monthly XAU chart shows gold's impressive momentum within a broad ascending channel dating back to 2008. Ole S Hansen, Head of Commodity Strategy at Saxo Bank, recently highlighted that from a long-term technical perspective, the $4,100–4,150 area represents the key resistance zone to watch.
Prices remain firmly within this rising channel and are now approaching the upper boundary. Gold broke decisively above its long-standing ceiling at $2,075 in late 2023, which set the foundation for the current surge. Successive bullish monthly candles demonstrate strong buying demand, pushing the metal closer to the upper channel resistance. Beyond the psychological $4,000 mark, technical patterns point to $4,100–4,150 as the pivotal barrier.
What's Fueling Gold's Strength
Several factors explain the sharp rally. Heightened geopolitical tensions and concerns about sovereign debt levels are driving safe-haven demand. Central banks continue to purchase gold at record levels, providing structural price support. Additionally, uncertainty around U.S. monetary policy and persistent inflation concerns strengthen gold's appeal as a hedge.
Key Price Levels:
- Immediate Resistance: $4,000 (psychological milestone)
- Critical Zone: $4,100–4,150 (upper channel boundary)
- Support Areas: $3,500 (initial support), $2,075 (key long-term floor)
The Real Test Lies Ahead
While breaking through $4,000 will generate significant market buzz, gold's sustainability depends on overcoming the $4,100–4,150 resistance band. A successful breakthrough could propel prices into uncharted territory, while failure may trigger consolidation. For traders and investors, the focus should remain on this technical hurdle rather than the round-number milestone.
Usman Salis
