- Gold recovers some of its losses after a two-day downturn, but the overall trend is still downward.
- Investor caution and reduced geopolitical optimism following a sell-off on Wall Street help precious metals rebound.
- Xau/USD nears $3,335, sitting at the upper boundary of a descending wedge pattern.
On Wednesday, gold (Xau/USD) managed to recover some losses, finding support from negative market sentiment. After dipping to just over $3,300—a two-week low—precious metals bounced back, yet they remain below the previous support level around $3,330, which keeps the broader negative trend active.
The recovery in bullion prices is being supported by the sentiment in the stock market after Tuesday’s sell-off. Additionally, investor hopes for an immediate peace deal in Ukraine are cooling, particularly after a recent meeting between Russian President Putin and Ukrainian President Zelensky.
Technical Analysis: Bulls need to break wedge tops for $3,335
The Xau/USD pair transactions displayed on the 4-hour chart reveal movement within a descending wedge. This pattern often suggests continuous trading, typically yielding favorable outcomes. However, bulls may encounter significant resistance in the $3,325 to $3,335 range, where previous lows from August 12, 14, and 18 converge with descending trendlines from the peak on August 8.
If they can push above that level, the next target is Tuesday’s high of $3,345, followed by $3,360 on August 18, and further up to $3,375, also on August 18.
On the downside, the immediate support lies between $3,305 and $3,315, coinciding with Tuesday’s low and highs from August 31, along with the wedge’s lower edges. The further support target would be the low of nearly $3,280 from August 1.
