Gold trading closer to its record high

XAU/USD has been in a bullish trend for the past few years, with the price respecting the longer-term moving average (200 weeks) as support. It is currently in a consolidation phase, trading within a defined range. Triple top had been in formation since 2020, with last high reached in May that followed a multiple bottom near the lower side of the range. The width of the range is of circa 450$, and currently the commodity is trying to consolidate above 2,000 $/oz . Next resistance would be the top in area 2,071 and a breakout of this level would generate a bullish leg with high probability with closer resistance near 1,100. A price action that would see the weekly close much lower than its high near the resistance area would suggest a continuation of the trading range with opportunity for medium term short sellers.

Given the width of the trading band on the weekly chart is premature to project any bearish long term target since market sentiment is likely to deteriorate only with a drop confirmed below 1,900. The RSI indicates a slightly stronger bullish momentum but isn’t in the overbought territory yet.