3 min read Gold has broken sharply higher, and the driver is a counterintuitive one: easing Middle East tension has dragged oil down, cooling inflation fears and paring rate-hike bets just as Friday’s non-farm payrolls come into view.
Gold’s 1-hour chart shows the breakout confirmed by a spike in volume, with RSI now beginning to diverge lower.
Gold has broken out of its recent range on the 1-hour chart, and the volume spike we flagged in our previous coverage of gold has now arrived on the breakout itself, helping to confirm the move.
Momentum, however, appears to be cooling. RSI is printing a bearish divergence, with price pushing to higher highs while the indicator turns lower, a sign that the strength behind the breakout could be starting to fade in the near term.
That opens the door to a potential mean reversion move lower ahead of Friday’s non-farm payrolls. If that plays out, the zone between 4,150 and 4,200 could come back into view as potential support, and it is the area to watch for buyers to potentially step back in.
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