XAU/USD Technical Analysis (1-Hour Chart): Gold in a Short-Term Rebound, but Still in a Downtrend?

Market Background and Current Price Movement

As of July 31, 2025, XAU/USD (Gold/US Dollar) shows signs of a short-term rebound near the 3290 USD level after a significant decline. The downtrend that had persisted since the latter half of July temporarily halted near 3260 USD, leading to the current recovery phase. This movement may also reflect fundamental influences such as upcoming U.S. economic data releases and remarks from Federal Reserve members. In this article, we analyze the future direction of XAU/USD using technical analysis focusing on moving averages, MACD, and ADX indicators.

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Moving Average Analysis: Clear Signs of a Downward Structure

On the chart, both the short-term moving average (blue: 50MA) and long-term moving average (red: 200MA) are trending downward, with the price positioned below them. This indicates a bearish market sentiment in both the medium and long term. Traders appear to remain inclined to sell. Currently, the price is attempting a short-term rebound toward the 50MA, but unless it decisively breaks above it, the rebound may be viewed as a selling opportunity within the broader downtrend.

MACD: Watching for Momentum Reversal Signals

The MACD (Moving Average Convergence Divergence) remains below the signal line, but its downward momentum is weakening. The MACD histogram is also narrowing in the negative territory, suggesting a potential short-term momentum shift. In such cases, attention should be paid to changes in momentum, which may indicate early signs of a trend reversal. However, since the MACD remains below the zero line, a true shift from neutral to bullish would require a further price increase and continued momentum.

ADX: Indicates Strong Ongoing Trend

The ADX (Average Directional Index) is hovering around the 40 level, suggesting a very strong trend. The dominant direction remains bearish, and as long as ADX remains elevated, any rebounds may be limited. The ADX measures the “strength” of a trend, and a value above 25 is generally interpreted as indicating a market with a clear directional bias (see more details here).

Volume and Price Action: Increased on Sell-Off, Muted on Rebound

During the recent sell-off, trading volume surged sharply, indicating a large inflow of sell orders. In contrast, the current rebound is accompanied by declining volume, suggesting limited buying pressure. Rebounds without volume confirmation often lack sustainability and may face renewed selling pressure.

Support and Resistance Levels in Detail

Conclusion: Key Points for Traders to Watch

Overall, XAU/USD (Gold/USD) is showing a short-term rebound within a strong downward trend. While technical indicators show possible early signs of momentum reversal, the overall trend direction remains bearish.

Traders should be cautious of short-term long positions, as they carry the risk of going against the prevailing trend. In particular, the 3290–3330 USD range may act as a strong resistance zone. Unless this area is broken with conviction, further downside exploration is likely. The support levels at 3260 USD and 3230 USD are critical. A break below these could signal further downside pressure. Conversely, a break above resistance could point to a short-term trend reversal—but only if confirmed by volume and momentum indicators.

As market conditions are prone to volatility, traders should balance fundamentals and technicals when building strategies.

Disclaimer: This article is intended for informational purposes only and does not constitute investment advice. Please make trading decisions based on your own research and judgment.

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