As shown in the charts, XAU/USD quotations have reached historic peaks today. According to media reports, gold is behaving as a safe haven amid growing uncertainty, which is intensifying as the U.S. government shutdown continues. Meanwhile:
→ Gold prices may rise above $3,950 in the coming days, approaching the psychological level of $4,000. The chart underlines the firm dominance of demand forces.
Technical Analysis of the XAU/USD Chart
Analysing gold price fluctuations suggests the formation of an ascending channel, which has remained relevant since mid-last month.
On 30 September (when the price formed peak A) we noted that:
→ the sharp drop from peak A indicated bear confidence;
→ the price might correct towards $3,800, as bulls were exhausted, requiring another consolidation period to resume upward movement and form a “bull flag” pattern.
Indeed, the price soon tested the $3,800 level (shown by the arrow), after which bulls regained strength. However, a new “bull flag” did not form; instead, three peaks of a “head and shoulders” pattern (A–B–C) emerged, which did not lead to a reversal. This failed bearish pattern emphasised the bulls’ strength in today’s gold market.
From a bullish perspective, the price confidently broke above $3,900, where a local resistance line (shown in red) and the ascending channel’s median lie.
On the other hand, the price has approached the upper boundary of the channel, and the RSI indicator is already in the overbought zone.
If sentiment does not shift significantly, bulls’ attempt to reach the psychological level of $3,950 could make XAU/USD more vulnerable to a pullback – in which case the channel’s median could become the nearest target for sellers.
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