Gold Prices Surge to Key Resistance, Can XAU/USD Break Higher?
Gold Price Forecast Talking Points:
- Gold prices have climbed in recent days as coronavirus concerns linger
- The rally has pushed XAU/USD to test resistance around $1,610 as it aims higher still
- A continuation higher might emerge should the metal establish consistent price action above resistance
Gold Prices Surge to Probe Key Resistance, Can XAU/USD Break Higher?
Gold surged to the highest level since 2013 on Thursday as lingering coronavirus concerns worked in conjunction with the widely-watched technical pattern that had formed in the weeks prior. On the back of this bullish break out, gold will look to continue higher as the fundamental landscape remains accommodative and technical traders look to capitalize on a lack of resistance overhead.
Gold Price Chart: 4 - Hour Time Frame (August 2019 – February 2020)
To that end, topside barriers beyond $1,610 become increasingly difficult to identify because the territory is relatively foreign. Consequently, chartists will have to look back to 2011 for insight where a tenuous trendline around $1,628.5 can be outlined. Coinciding with various swing lows and highs from 2011 and 2012, the area could offer slight resistance to an attempt higher. Still, price will have to react to the level before we can project its importance with more confidence.
In similar fashion, subsequent resistance may reside around $1,686 – the swing high from February 2013. Either way, gold looks poised to continue higher at this stage and if price can surmount $1,610 comfortably, bulls will look to employ the level as support moving forward. That being said, the slightly higher high established on Wednesday is an encouraging development in and of itself. In the meantime, follow @PeterHanksFX on Twitter for updates and analysis.
Gold Price Chart: Weekly Time Frame (August 2011 – February 2020)
--Written by Peter Hanks, Junior Analyst for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.