Gold Rebounds After Holding Firm Above Key Support

Gold extended its recovery for a second straight session on Friday, reaching its highest level since September 9. The advance was largely supported by declining oil prices, which helped offset the expected headwind from the Federal Reserve’s latest rate increase.

The recent rebound has improved the technical outlook on the daily chart following multiple failed attempts to break below the neckline of a daily Head and Shoulders formation. The support zone, reinforced by the 55-day moving average and the 61.8% Fibonacci retracement of the $3,995-$4,697 rally, successfully contained downside pressure and prevented the pattern from triggering a bearish signal.

An initial reversal signal is now taking shape after gold broke above the $4,344 barrier, which marks the 23.6% Fibonacci retracement of the $4,697-$4,235 decline and coincides with the 10-day moving average. Confirmation of a stronger recovery would require a sustained move above the $4,411-$4,420 area, where the 38.2% Fibonacci retracement and the 20-day moving average converge.

However, caution remains warranted. A return below $4,344 on a closing basis would indicate that the recovery is losing momentum and could leave the downside vulnerable to renewed selling pressure.

Res: 4400; 4411; 4420; 4466
Sup: 4344; 4320; 4282; 4259