For swing chart traders, the key support is the main bottom at $3886.46. The trend will change to down according to the lower bottom rule if this level is taken out. However, without a lower top to accompany it, the momentum may actually shift to neutral.

Gold Price Stretched $1,110 Above 52-Week Moving Average

The main support and dominant trend indicator is the 52-week moving average at $3439.44. XAUUSD has held cleanly above this indicator since the week-ending October 20, 2023 so we know it is powerful. Other than the early stages of the rally from October 2023 to February 2024 when the market held closely to the moving average, it has been comfortably above.

We can deal with a steady 45-degree rise since most great rallies tend to follow this pattern. However, since the week-ending September 5, or the week that it broke out over $3500.20, the rally has been nearly vertical.

Parabolic Rally Targets Week-Ending January 10 for Potential Top

When XAUUSD topped earlier in the year in April at $3500.20, it proceeded to move sideways for 18 weeks. Price was $844.76 above the 52-week moving average at that time. At last week’s high at $4550.15, price was $1110.71 above it.

What we have is a situation where price is ahead of time. Time is 18 weeks and 18 weeks from the breakout over $3500.20 is the week-ending January 10. We’ll be watching at that time for signs of a top.

Thin Holiday Volume Drives Price Action

We all know the bullish narrative driving prices higher so there is no sense going into great detail. We have central bank buying, Fed rate cut expectations and geopolitical risks.