XAUUSD is holding above key support near $2,505, with gold bulls aiming for a potential rally toward $2,560.
Watch today’s video for an in-depth analysis of the critical levels to watch and the impact of the weakening US dollar on gold’s next move.
XAUUSD is holding above key support to start the week but is beginning to weigh more heavily on its August channel.
I discussed this 4-hour channel support over the weekend, which comes in near $2,505.
This is a critical level for bulls this week, but the must-hold level is closer to $2,470.
If XAUUSD can hold within this 4-hour channel, gold has a chance at retesting $2,560.
However, a sustained break above the recent highs at $2,527 is needed to open up the key resistance area in the $2,560 range.
The US dollar will undoubtedly play a pivotal role in gold’s next move.
The recent weakness in the DXY has benefited gold bulls, given that the two markets tend to move inversely.
So, keeping an eye on the DXY as it tests key support at 100.60 will be crucial.
That said, the USD has looked incredibly weak this month, and symmetry favors a move toward DXY 99.60, just as it favors XAUUSD toward $2,560.
Time will tell if that materializes.
