Spot gold prices took a breather after making new record highs earlier this week.

Is the commodity ready to extend its uptrend after falling to a technical support zone?

Today’s 4-hour chart may give us some clues!

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

If you missed yesterday’s market price action, you should know that the U.S. dollar saw buying pressure as some traders priced lower-tier U.S. reports pointing to a not-so-cool labor market. Other traders also took profits in case FOMC Chairman Powell’s speech later today turns out to be more hawkish than analysts are expecting.

Spot gold, which turned lower from its $2,530 record highs, hit bottom near $2,470 before seeing bullish reversal candlesticks and somewhat sustained buying pressure.

Does this mean that XAU/USD is ready to extend its August uptrend?

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!

Take note that XAU/USD turned higher at the 61.8% Fibonacci retracement level, which is coincidentally near a previous resistance zone and a trend line support that’s been solid since the start of the month.

If XAU/USD prints a couple more bullish candlesticks, we could see a technical bounce from the 50% Fib and Pivot Point area. The pair may draw in more buyers who could sustain an upswing all the way to the $2,515 inflection point or the $2,530 previous highs.

But if the U.S. dollar demand gains momentum, then XAU/USD may extend its current downswing. Look out for bearish candlesticks and sustained trading below the trend line and the $2,475 previous resistance zone, which could lead to a revisit of the $2,450 or $2,440 previous inflection points.

Good luck and good trading this setup!