Is Gold getting ready for its next leg higher?

Gold (XAU/USD) continues to hold firm above the $5,000 level as the fundamental backdrop remains supportive for the precious metal. Sticky inflation data continues to challenge the narrative of imminent rate cuts, while the broader debasement trade, where investors seek hard assets as a hedge against currency devaluation and expanding government debt, keeps gold well bid. These two forces have been the primary drivers behind gold’s historic rally, and neither shows signs of fading any time soon.

From a technical perspective, gold is now forming what appears to be an ascending triangle on the 4-hour chart, with flat resistance sitting around the $5,000-$5,100 zone and a series of higher lows building underneath. The measured move of this pattern, taken from the low to the high of the formation, aligns almost perfectly with the previous all-time highs just above $5,500, which also coincides with the conservative measured move target marked on the chart. Price is currently sitting near the apex of this pattern, which suggests that if it’s going to resolve, we could see that happen as early as today or tomorrow.

One important thing to note about this particular setup is the context in which this ascending triangle is forming. A textbook ascending triangle is typically a continuation pattern where price enters from below during an established uptrend, with buyers consistently bidding higher into a fixed resistance level until they eventually overwhelm sellers. What we’re seeing here is slightly different. This triangle is forming after gold topped out near $5,600 and sold off sharply, meaning price entered the pattern from above rather than below. This shifts the character of the pattern from a classic bullish continuation to more of a consolidation structure within the broader uptrend. It doesn’t invalidate the pattern or the measured move target, but it’s worth keeping in mind that the probability profile may differ slightly from the textbook setup.

What’s encouraging from a momentum perspective is the behaviour of both the Relative Strength Index (RSI) and On Balance Volume (OBV). The RSI is sitting at a healthy 56, holding above the key 50 midpoint, and we can see highs forming on the RSI while price prints equal highs at resistance. More importantly, the OBV is telling a bullish story here, printing higher highs while price remains range-bound at the flat resistance level. This divergence between rising OBV and flat price action suggests that buying pressure is quietly building beneath the surface, which is exactly what you’d want to see heading into a potential breakout.

The two key levels to watch are $5,000 – $5,100 as the current resistance zone and flat top of the triangle, and $5,500 above as both the measured move target and the area of the previous all-time highs.

Trade Now

Trading involves risk.