XAU/USD is trading at $4,716 after a confirmed breakout of the descending channel. The technical structure points higher, but Friday’s US employment report could sharply change the balance of power.
What Happened on the Chart
Since April 17, gold moved within a descending parallel channel — every attempt at growth was suppressed at the upper boundary. On May 1, bulls finally broke through resistance. The breakout was followed by a classic retest of the channel’s median line around $4,540 — buyers defended this level on May 5, and the price moved toward the target mark of $4,772.
On May 7, the price reached the target, but the last four-hour candle showed a 1.13% correction back to $4,692. This is a standard profit-taking before a major macro event, not a reversal of the structure.
The four-hour RSI is in the bullish zone without signs of overbought — there is still room for further growth. Volatility expanded at the moment of the breakout and is now cooling off, which is typical for a pause after an impulsive move.
Daily Structure: Third Attempt at Key Fibonacci
On the daily timeframe, gold is forming an interesting picture. After the all-time high of $5,598 at the end of January, the price corrected to the 0.618 Fibonacci level at $4,376. The rebound reached 0.382 around $4,843, then a second corrective wave followed, forming a higher low above the 0.5 level ($4,609).
Now, there is a third attempt to break through the 0.382 zone. The daily RSI is in the neutral zone around 45 — there is no overbought, which does not limit growth potential. A clean close above $4,843 opens the way to the 0.236 Fibonacci level at $5,131.
Reversal scenario: losing the 0.618 Fibonacci level flips the structure and opens movement toward $4,044.
Levels and Scenarios
Analyst Karcebe clearly formulated the conditions for continued growth: a close above $4,720 triggers the next bullish wave. The first target is $4,785, the main one is $4,850, which coincides with the 0.382 Fibonacci level on the daily chart.
Losing $4,670 invalidates the immediate bullish thesis and shifts attention back to the channel’s median line around $4,540. As long as this level is held, the path of least resistance is upward.
NFP as a Catalyst in Both Directions
Friday’s employment report — Non-Farm Payrolls — becomes the main short-term trigger. The logic here is not straightforward.
Weak employment data increases the likelihood of Fed policy easing, which is historically positive for gold as a non-yielding asset. Strong data theoretically supports the dollar and may create short-term pressure on XAU — however, in the current macro environment, where investors are actively seeking safe-haven assets, the market reaction may be non-standard.
Since the beginning of the year, gold has shown an atypical correlation with traditional drivers. The January all-time high was reached during a period when the dollar was also relatively strong — the geopolitical premium and demand from central banks outweigh the usual logic.
Context: From $3,000 to $5,598 in a Year
To understand the scale of the move, it is enough to recall that a year ago gold was trading around $3,000. The breakout of $4,000, $4,500, and the subsequent move to the all-time high of $5,598 happened in less than twelve months.
The current correction from the highs — about 16% — looks moderate against this growth. The formation of a higher low and a confirmed breakout of the descending channel indicate that the market sees this decline as a correction within an uptrend, not a reversal.
A weekly close above $4,850 will confirm the bullish scenario. In this case, the next significant zone becomes $5,131, and a return to all-time highs will move from the forecast category to the working scenario category.
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