Check out this new consolidation pattern on the 4-hour time frame of gold!

Can the sideways price action keep going or are we about to see a breakout soon?

Here are the nearby inflection points I’m watching closely:

Gold (XAU/USD) 4-hour Chart by TradingView

This precious metal has been forming higher lows since last month and has been hitting a ceiling around $2,475, creating an ascending triangle chart pattern.

Gold appears to be retreating from the triangle resistance once more, potentially setting its sights back on support near the pivot point level ($2,418.17) and the moving averages. The 100 SMA is above the 200 SMA to indicate that support is more likely to hold than to break.

Or are we about to see a bullish breakout next?

Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on gold and market sentiment, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

Earlier this week, the U.S. economy printed mostly downbeat inflation readings, as its producer price index and headline annual CPI fell short of market estimates. For many, this could mean stronger odds of a larger reduction in Fed interest rates, which would likely be a plus for overall economic growth later on.

As a result, demand for commodities could pick up, and so can investors’ appetite for risk assets like gold. In contrast, the safe-haven U.S. dollar could undergo some downside, possibly lifting XAU/USD past its triangle top.

Keep an eye out for a move above R1 ($2,471.96) as this could pave the way for a test of the next upside barrier at R2 ($2,512.66) or even a longer-term rally that’s the same height as the triangle formation.