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Gold Price Targets: XAU Struggles at Critical Resistance- GLD at Risk

Gold Price Targets: XAU Struggles at Critical Resistance- GLD at Risk

2019-09-06 17:15:00
Michael Boutros, Technical Strategist
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Gold prices are softer this week with XAU/USD struggling to close above a key resistance confluence for over a month now. These are the updated targets and invalidation levels that matter on the XAU/USD weekly charts. Review my latestWeekly Strategy Webinar for an in-depth breakdown of this gold price setup and more.

New to Gold Trading? Get started with this Free How to Trade Gold -Beginners Guide

Gold Price Chart - XAU/USD Weekly

Gold Price Chart - XAU/USD Weekly - GLD Trade Outlook- XAU Technical Forecast

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

Notes: In my last Gold Price Weekly Outlook we warned to, “Watch the weekly close – IF price fails to hold above the 1522/26 zone, look for weakness back towards uptrend trend support into the start of September trade.” Price briefly registered a high at 1556 this week before turning with XAU/USD poised to mark an outside weekly-reversal off fresh record highs ahead of the New York close on Friday. Note that gold has now failed to close above critical resistance for the fourth-consecutive week – highlighting the risk for a deeper correction in price while below this region.

Initial weekly support unchanged at the highlighted trendline confluence around ~1465. A close below 1451 would be needed to suggest a more significant high was registered this week. A pivot back above 1526 once again eyes resistance at 1558 - a breach / close above this threshold would have us targeting key resistance at the 61.8% retracement of the decline off the 2011 record highs at 1586- look for a bigger reaction there IF reached.

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

Bottom line: While the broader outlook for gold remains weighted to the topside, price remain vulnerable while below confluence resistance at 1522/26. From a trading standpoint, expect sideways to lower price action – be on the lookout for topside exhaustion on rebounds towards this threshold. Ultimately a larger pullback may offer more favorable long-entries closer to trend support. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trading levels.

Even the most seasoned traders need a reminder every now and then-Avoid these Mistakes in your trading

Gold Trader Sentiment (XAU/USD)

Gold Trader Sentiment - XAU/USD Price Chart - GLD Trader Outlook - Technical Forecast
  • A summary of IG Client Sentiment shows traders are net-long Gold - the ratio stands at +1.8 (64.3% of traders are long) – bearish reading
  • Long positions are 11.2% higher than yesterday and 0.7% higher from last week
  • Short positions are 13.2% lower than yesterday and 4.8% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger Spot Gold-bearish contrarian trading bias from a sentiment standpoint.

See how shifts in Gold retail positioning are impacting trend- Learn more about sentiment!

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Previous Weekly Technical Charts

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--- Written by Michael Boutros, Technical Currency 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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