OANDA:XAUUSD   Gold Spot / U.S. Dollar
Gold has consolidated for more than two years, and now it may be inching toward a breakout.

The first pattern on today’s weekly chart is the rally in October between roughly $1,812 and $2,000. That move broke a falling trendline from the summer when bond yields were climbing.

XAUUSD then pulled back to bounce above the trendline, turning old resistance into new support. Also notice how it retraced slightly less than 50 percent of the rally. That may indicate that a new bullish move is starting.

Next consider how this month’s low seems to represent a higher low versus October. Higher lows can also signal the start of an uptrend. (Higher highs occurred when the trendline broke.)

It’s additionally noteworthy that 2023’s troughs were slightly above long-term peaks from October 2012. That could be another case of old resistance becoming new support.

Finally, XAUUSD’s movement resembles the price action in the euro against the U.S. dollar. (They have a strong historical correlation, with bullion often benefiting from dollar weakness.) Both have gained as lower inflation makes investors think the Federal Reserve will stop hiking interest rates and potentially lower them next year.

That belief could spur price movement into big macro events like PCE inflation on Thursday and non-farm payrolls on December 8. Even bigger catalysts may be the consumer price index (CPI) on December 12 and the next Fed meeting on December 13.

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