After surpassing 2100 in low volume, gold retraced below the significant three-year resistance level of 2075. Currently, since early November, gold has been following an uptrend channel, and the trendlines have functioned nearly perfectly as both supports and resistances, with the exception of the brief surge over 2100 that couldn’t be sustained for an extended period.

Expectations of a Federal Reserve (FED) rate cut and ongoing geopolitical risks continue to bolster the gold price. However, the excessive optimism regarding rate cuts might impede the potential for the next upward wave.

(XAUUSD Daily Chart)

The 2010-2015 zone serves as a crucial support level. Both the lower boundary of the trend channel and the Fibonacci 23.6% level converge in this area. If this support holds, gold may attempt another move towards the formidable 2075 resistance. However, the 2075 level has been a strong barrier for the gold price since the 2020 COVID surge, preventing gold from advancing on more than four occasions. Additionally, gold is currently perceived as relatively overpriced.

As long as the 2075 resistance holds, a downward break of the uptrend channel seems to be a more likely scenario, making any upward movements potential selling opportunities. Such a break could lead the price down towards 1940 in the coming weeks. Nevertheless, if the 2075 resistance is breached, signaling an end to the three-year flat movement, upward pressure on the price might significantly increase.