Gold (XAU/USD) Technical Outlook: Bullish Above $1,850
- Gold prices bounce back after clearing one major technical hurdle.
- XAU/USD bulls aim for Fibonacci resistance from historical move above $1,880..
- Psychological support and resistance assist in driving price action, at least for now.
Gold (XAU) Gains on Dollar Uncertainty – Can Bulls Claim $1,880?
Gold prices ended the week holding onto an estimated 2.6% after driving prices back above $1,850. As fundamentals continued to drive sentiment, economic data provided an additional headwind for the precious metal.
After rising an impressive 15% rally from the November low ($1618.3), XAU/USD began the new year upbeat, driving prices higher.
However, after reaching a high of $1871.3 on Wednesday, the release of the December FOMC minutes and positive employment data provided temporary relief for the Dollar. As commodity prices continued cautiously ahead of US non-farm payrolls, gold prices fell to a weekly low of $1829.9 before ripping higher.
Gold (XAU/USD) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
While bulls prepare to tackle the next big barrier of resistance at the weekly high of $1875, a break of $1880 could open the door for a retest of $1900. Although the weekly chart illustrates the way that these levels provided support in August 2020 and resistance over the past two years, the Dollar will likely contribute to fueling bullish or bearish momentum.
Gold (XAU/USD) Weekly Chart
Chart prepared by Tammy Da Costa using TradingView
Gold (XAU/USD) Technical Levels
| Support | Resistance |
|---|---|
| S1: $1,850 - $1,848.6 | R1: $1,875 (weekly high) |
| S2: $1,829.9 (weekly low) | R2: $1,880 (psychological level) |
| S3: $1,800 | R3: $1,900 |
| Change in | Longs | Shorts | OI |
| Daily | 6% | 6% | 6% |
| Weekly | -13% | 27% | 2% |
--- Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
