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Gold Price Short-term Outlook: Gold Bulls Eye Resistance

Gold Price Short-term Outlook: Gold Bulls Eye Resistance

Michael Boutros, Strategist

Gold Technical Price Outlook: XAU/USD Short-term Trade Levels

Gold prices are attempting to mark a third consecutive weekly advance with a rally of more than 10.6% off the yearly lows now approaching key resistance objectives into the November high. The risk rises for inflection in the days ahead with the weekly opening-range now in focus. These are the updated targets and invalidation levels that matter on the XAU/USD short-term technical charts. Review my latest Strategy Webinar for an in-depth breakdown of this gold technical setup and more.

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Gold Price Chart - XAU/USD Daily

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Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview

Technical Outlook: In last month’s Gold Short-term Price Outlook I noted that XAU/USD was approaching downtrend resistance and that, “a breach / close above confluent Fibonacci resistance at 1682/86 is needed to suggest a larger reversal may be underway with such a scenario exposing the August low-day close / 61.8% retracement at 1729/34- look for a larger reaction there IF reached.” A topside breach on November 11th fueled a rally of more than 3% with gold now approaching the next lateral resistance zone at 1788/86- a region defined by the 38.2% retracement of the yearly range and the January low-week close. Risk for price inflection into this threshold in the days ahead.

Gold Price Chart - XAU/USD 240min

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Notes: A closer look at Gold price action shows XAU/USD trading within the confines of an ascending pitchfork formation extending off the October / November lows with the 75% parallel further highlighting resistance into 1788/91. Ultimately, a breach / close above the 200-day / 52-week moving averages / August high at 1805/07 is needed to fuel the next leg higher in price towards 1842.

Initial support now rests with the weekly opening-range low / December low at 1753 backed by 1729 and 1702 with medium-term bullish invalidation now raised to 1680. Ultimately, a break / close below the yearly low-day close at 1659 would be needed to mark resumption of the broader downtrend.

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Bottom line: The gold breakout is now approaching key technical pivot zones with the weekly opening-range taking shape just below- look to the near-term breakout for guidance. From a trading standpoint, losses should be limited to 1700 IF price is heading higher on this stretch with a close above 1807 needed to clear the way. Review my latest Gold Weekly Price Outlook for a closer look at the longer-term XAU/USD technical trading levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Gold Trader Sentiment – XAU/USD Price Chart

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  • A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +2.51 (71.51% of traders are long) – typically bearish reading
  • Long positions are 1.82% lower than yesterday and 17.30% lower from last week
  • Short positions are 1.08% lower than yesterday and 12.50% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. From a sentiment standpoint, the recent changes in positioning warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long.
Gold Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 0% 2% 1%
Weekly 17% -23% 4%
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- Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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