Are gold bulls struggling to sustain the precious metal’s climb these days?

Here’s a classic reversal pattern I’m watching on the 4-hour time frame.

Gold (XAU/USD) 4-hour Chart by TradingView

Gold made a couple of failed attempts to bust through its July highs around the $2,475 area, falling back to the area of interest near $2,375 to form a double top pattern.

Recession jitters seem to be haunting investors again these days, as consecutive misses in top-tier U.S. data points have sparked some risk-off flows in the latest trading sessions.

XAU/USD has yet to test and break below the neckline support to confirm a potential reversal from the uptrend, as the 200 SMA dynamic inflection point at S1 ($2,382.18) appears to be keeping losses at bay for now.

Is the support zone likely to hold once more?

Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on gold and market sentiment, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

Risk assets like commodities are still on weak footing, even though the market panic appears to have eased so far. Stay on your toes for another wave of risk-off vibes, as these could be enough to spur a neckline breakdown and a gold selloff that’s the same height as the chart formation.

On the flip side, sustained risk-taking on a recovery in U.S. equities or a fresh batch of positive global data points could be enough for the floor to hold, potentially keeping gold on track towards bouncing back to the highs near R1 ($2,490.26).

Whichever way you decide to play this setup, make sure to practice proper risk management techniques and stay updated on the major market catalysts lined up!