Gold Rebounds from Key Support: Can XAU/USD Extend Its Recovery Above 4,100?

Commodity

Summary:

XAU/USD is trading around 4,140 after recovering from last week's sharp decline. Softer U.S. employment data has weakened the U.S. dollar and supported gold...

BUY XAUUSD

EXP

PENDING

4080.00

Entry Price

4200.00

4025.00

4130.31 +24.21 +0.59%

Pips

PENDING

4025.00

Exit Price

4080.00

Entry Price

4200.00

Market Overview

Gold continues to stabilize after rebounding from the 4,030 support area established during last week's selloff. The weaker-than-expected U.S. labor market report significantly reduced expectations for immediate Federal Reserve tightening, allowing Treasury yields to retreat and improving demand for non-yielding assets such as gold. However, renewed geopolitical tensions in the Middle East have lifted oil prices again, raising inflation concerns that could encourage the Fed to maintain a hawkish stance for longer. These opposing macroeconomic forces have pushed gold into a consolidation phase rather than establishing a clear directional trend. Investors are now primarily focused on the release of the FOMC Minutes, searching for clues regarding the probability of another rate increase later this year.

Market Sentiment

Market sentiment has improved compared with the beginning of July, but confidence remains selective rather than aggressive. Institutional flows indicate investors are gradually rebuilding defensive positions after reducing expectations of further policy tightening, while central-bank gold purchases continue to provide structural support for prices. Nevertheless, traders remain reluctant to chase higher prices immediately below major resistance because any unexpectedly hawkish comments from the Federal Reserve could quickly strengthen the U.S. dollar. As a result, current positioning reflects cautious optimism instead of broad risk-on buying, with participants waiting for confirmation before expanding long exposure.

Technical Analysis

Gold Rebounds from Key Support: Can XAU/USD Extend Its Recovery Above 4,100?_1

On the M15 timeframe, Bollinger Bands (20,0,2) have begun expanding after several sessions of contraction, suggesting intraday volatility is returning. Price is holding above the middle band while repeatedly testing the upper band, indicating buyers continue to maintain short-term momentum.

The Ichimoku Kinko Hyo (9,26,52) structure has turned constructive. Price is trading above both the Tenkan-sen and Kijun-sen while attempting to remain above the cloud, indicating improving bullish momentum. The future cloud is beginning to flatten, suggesting selling pressure has weakened considerably compared with last week.

The Stochastic (5,3,3) has recovered from oversold territory and continues moving higher without yet reaching extreme overbought conditions, leaving room for additional upside if buying volume increases. Immediate support is located around 4,120–4,130, while the next resistance remains near 4,180–4,205. A sustained breakout above 4,205 would confirm continuation toward higher resistance, whereas a loss of 4,120 would expose the market to another test of the 4,080–4,030 demand zone.

Trading Recommendation

Entry: 4080

Take Profit: 4200

Stop Loss: 4025

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