As shown on the XAU/USD chart today, the price of gold is:

→ above the psychological level of $2,500 per ounce;

→ near a key resistance marked by a red line labelled Support 2. This line has been preventing further price growth several times since 20 August, when the all-time high was reached.

If the bulls manage to break through this line, it could turn into a support level, as happened with Support 1 (as indicated by arrows). This would set the stage for a potential rally within the upward channel, marked in blue. From a technical analysis perspective, a break above the “bull flag” pattern could signal a resumption of the uptrend.

On the other hand, we can't rule out the possibility of a price reversal at Support 2. In this case, the chart could start to form a bearish “triple top” pattern from a technical standpoint.

Which scenario – bullish or bearish – will play out? Much depends on the fundamentals. Today at 15:30 GMT+3, US labour market data will be released, which is likely to have a strong impact on financial markets due to the upcoming Federal Reserve meeting, where a rate cut is expected.

Disappointing data on unemployment and job creation could indicate issues in the US economy and lead to a rise in gold prices, as gold is seen as a safe-haven asset during times of geopolitical tension and economic uncertainty.

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