I’ve discussed the significance of $1,680 for XAUUSD since March 2nd.
It’s a confluence of support for gold based on three key factors.
- It’s a critical horizontal level dating back to February
- It is (or at least was) the bottom of a descending channel
- It’s the 61.8% Fibonacci of the 2020 range
Gold bounced from the $1,680 area in March, but the bullish momentum faded last week.
However, Thursday’s rebound from support looks much more convincing, at least so far.
Notice how Thursday’s rally has engulfed Wednesday’s selloff.
That’s a pretty clear indication that buyers intend to hold XAUUSD above $1,680.
While there are no guarantees, the double bottom’s measured objective is $1,830, which happens to be the 38.2% Fibonacci of the 2020 range.
Just keep in mind that $1,760 will be a key hurdle for buyers.
The $1,760 level was resistance in May of last year before flipping to support in June and early July.
It’s also the 50% retracement of the 2020 range.
So, although today’s XAUUSD rally is constructive, buyers still need to clear $1,760 to open the door to $1,830.
Only a daily close below $1,680 would negate the bullish outlook.
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