Gold (XAU/USD) staged an impressive recovery on Thursday, rebounding from recent lows and reclaiming vital technical levels. The move has reinvigorated bullish sentiment, signaling that the recent pullback may have run its course and that a potential breakout could be on the horizon.
Gold Rebounds from $3,310 – Support Holds Firm
During Thursday’s session, gold prices dipped to a fresh multi-day low near $3,310, retesting a key dynamic support zone tied to a short-term downtrend line. This level, previously a breakout area, has now flipped to support—suggesting growing buyer interest around this price range.
Following the intraday dip, bulls took control, pushing prices back above the 20-day moving average (currently near $3,331), along with reclaiming a few important anchored VWAP levels and the 50-day MA. Notably, trading volume saw an uptick after several sessions of subdued activity, reinforcing the strength of this recovery.
Technical Setup Signals Pullback Completion
The price action suggests the end of a short-term correction, especially as gold now trades above a rising trendline that forms the lower boundary of a bullish pennant pattern. If the metal can sustain a daily close above the 20-day MA, it would confirm renewed upside strength.
Adding to the bullish case is the emergence of a hammer candlestick on the daily chart. While not perfectly formed at the base of a downtrend, this pattern still reflects a sharp intraday reversal and could act as an early bullish signal—especially if Friday’s session breaks above Thursday’s high at $3,352.
Watch for Bull Pennant Breakout Above $3,377
Despite Thursday’s bullish bounce, gold remains confined within a narrow five-day price band. A decisive break above $3,377—the recent swing high and the top of the pennant—would confirm a continuation of the broader bullish trend.
That level also marks a three-week high, and surpassing it would place the precious metal in striking distance of the upper boundary of the pennant formation. This breakout could trigger a powerful upside move, or alternatively, lead to further consolidation before the next leg higher.
Weekly Trend Structure Shows Strength
From a broader perspective, gold is forming a stronger weekly trend pattern, printing both a higher low and a higher high this week. This is the second consecutive week of upward movement, a sign of building bullish pressure.
A confirmed breakout above $3,451, a key swing high from earlier in the trend, would reinforce the momentum and open the door to the next major target near $3,578, as projected by a rising ABCD harmonic pattern.
🔑 Key Levels to Watch
| Support | Resistance |
|---|---|
| $3,310 (trendline) | $3,352 (intraday high) |
| $3,331 (20-day MA) | $3,377 (pennant breakout level) |
| $3,300 | $3,451 (swing high) |
| $3,578 (ABCD target) |
📈 Conclusion
Gold’s recent price action suggests a bullish setup is forming following a deeper pullback. While short-term volatility persists, the reclaim of key moving averages and supportive technical patterns signal potential upside. A breakout above $3,377 could be the start of a significant move higher, especially if macroeconomic uncertainty continues to drive safe-haven demand.
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