As shown in the XAU/USD chart, last Thursday, the price of gold dropped below $2,540. Today, however, the precious metal has surged above $2,660 per ounce.
The more than 5% weekly increase was driven by a new wave of international tensions, particularly the escalation surrounding the approval for Ukraine to use Western long-range weapons for strikes deep into Russian territory.
Technical analysis of the XAU/USD chart highlights that last week’s upward reversal once again demonstrates how effectively parallel channel lines can work. During the summer, the median line of the ascending channel (marked in blue) acted as support. However, following its bearish breakout on 11 November, the lower boundary of the channel, reinforced by the $2,535 level (which served as resistance in August and September), provided support for the price.
Will Gold Prices Continue to Rise?
Much will depend on the fundamental backdrop:
→ Geopolitical news;
→ The release of economic indicators. For instance, at 16:30 GMT+3 today, the US jobless claims report will be published, while tomorrow will bring PMI data for various countries.
Further growth in gold prices cannot be ruled out, especially given the long-term upward trend. However, it is worth noting that bulls have approached a significant resistance level near $2,677. This area saw bearish dominance on 11 November, leading to a breakout of the median line. Bears may attempt to defend control of this level.
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