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Gold (XAU/USD) Rips Higher – $1,850 Support Holds at Prior Resistance

Gold (XAU/USD) Rips Higher – $1,850 Support Holds at Prior Resistance

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.
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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

Graphical user interface, chart  Description automatically generated

Chart prepared by Tammy Da Costa using TradingView

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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, bar chart  Description automatically generated

Chart prepared by Tammy Da Costa using TradingView

Gold (XAU/USD) Technical Levels

SupportResistance
S1: $1,850 - $1,848.6R1: $1,875 (weekly high)
S2: $1,829.9 (weekly low)R2: $1,880 (psychological level)
S3: $1,800R3: $1,900
Gold Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 4% -1% 2%
Weekly -15% 18% -2%
What does it mean for price action?
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--- Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707

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

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