XAU/USD: Gold Volatility Cools Once More
Today’s daily XAU/USD chart indicates that the ADX indicator is trending down later than the extreme swings viewn in October. This points to:
→ a decline in gold price volatility;
→ the market finding equilibrium around the psychological $4,000 level;
→ a scenario reminiscent of mid-July, when volatility was similarly subdued.
Back then, we:
→ identified an ascending channel;
→ noted that purchaseing and tradeing pressures were in balance, effectively reflecting all key price drivers.
Looking back, the market moved through a consolidation phase (A) before the rally resumed (B) with renewed momentum, breaking the R1 resistance of the consolidation pattern.
A similar situation appears to be developing now, with the market entering a new consolidation period (C). Price fluctuations around $4,000 are shaped by several factors:
→ Fed expectations: Traders are cautious about pushing gold to new highs ($4,400) without further assurances on monetary easing, but they are also reluctant to trade below $3,900, as the global rate-cut cycle is still underway.
→ US Dollar strength (DXY) viewn from late October into ahead November.
→ Stabilisation in geopolitical tensions.
Analysts from JPMorgan, Goldman Sachs, and independent observers suggest gold may remain in the $3,950–$4,150 range through the end of 2025.
By drawing a parallel with previous patterns, we can anticipate that R2 will hold, with bullish momentum pausing while gold drifts towards the lower boundary of the current ascending channel.
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