Gold Breaks Above Key Trendline, But Bullish Case Depends on Sustained Close

Gold prices have broken above a well-defined descending trendline on the daily chart, marking an improvement in momentum. This comes after several months of lower highs and failed recovery attempts since the correction began.

The breakout is significant as it indicates that selling pressure may be easing, allowing buyers to regain control. Additionally, gold has reclaimed the 4,208-resistance level, which was previously defended by demand at 3,885-4,000.

However, despite this improvement, the broader trend remains bearish as gold is still below the 126-day moving average near 4,530. A decisive move above this average would signal a shift in medium-term momentum back in favor of buyers.

The next key resistance level comes in around 4,890, where the previous rally lost momentum before the correction accelerated. On the downside, 4,208 is now the first level to watch, with the 3,885-support area remaining the most important floor on the daily chart.

The shorter-term picture has also improved, with gold breaking above the descending trendline that had limited every rally since the decline from 4,770. The market has climbed back above the 126-period moving average near 4,080, suggesting short-term momentum has turned in favor of buyers.