Gold prices hit a high of $4059.31 today, pushing towards the upper channel trendline which is currently crossing nearly $4070 and its trend is increasing. Earlier in the session, the market briefly tested this upper limit but failed to breach it, causing a slight pullback. This move highlights the importance of this channel’s resistance as a short-term hurdle for buyers trying to extend the uptrend.
On the other hand, the lower channel trend linewhich is now coming towards $4009 and is also on the rise, is the first area of defense for buyers. If sellers take profits and manage to push the price below this line, it would represent a small but significant victory in what has otherwise been a steady uptrend. That said, as long as the market remains above the lower trendline, buyers remain in firm control and the bullish momentum could easily accelerate in the event of another upward push.
In trending markets, overbought conditions alone are not enough to reverse the bias. Sellers must win a one-on-one battle key technical level to move the story. A breakout and sustained move below the lower channel line would give confidence to sellers and force buyers to pause. However, until this happens, the trend remains firmly in the hands of the bulls, with bullish momentum continuing to dominate.
