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Gold Weekly Technical Outlook: Four-Week Winning Streak Fails at 1300

Gold Weekly Technical Outlook: Four-Week Winning Streak Fails at 1300

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Gold Weekly Technical Outlook: Four-Week Winning Streak Fails at 1300

The gold price advance has lost stream just ahead of key resistance on the fourth consecutive weekly gain. Here are the levels that matter on the XAU/USD weekly chart.

In this series we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. Gold prices are posed to mark a fourth-consecutive weekly advance with the precious metal up 0.3% to trade at 1288 ahead of the New York close on Friday. Here are the key targets & invalidation levels that matter on the Gold (XAU/USD) weekly chart.

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Gold Weekly Price Chart (XAU/USD)


Notes:In my previous Gold Technical Outlook we noted that, “IF this breakout is legit, price would need to stabilize above 1269 with topside targets at 1302 backed by 1322.” Gold registered a high at 1298 before turning with price holding within a near-term consolidation just below. Note that a slight adjustment to the slope of our pitchfork better reflects the recent price pivots with the upper parallel further highlighting the significance of this resistance zone.

Look for initial support along the 52-week moving average, currently at ~1269 – weakness beyond this threshold would risk a more substantial correction towards the August trendline. Broader bullish invalidation remains at 1236 where the 200-week moving average and December 2017 low converge on channel support.

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Bottom line:

The gold breakout is testing the first major test of confluence resistance just ahead of the 2018 open at 1302 – a close above this region is needed to keep the immediate advance viable. IF price is going to pullback- this would be the post. From a trading standpoint, a good place to adjusts long-exposure and raise protective stops. Ultimately, a larger pullback may offer more favorable long-entries lower down near channel support. Review my latest Gold Price Outlook for a closer look at the near-term trading levels.

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Gold Trader Sentiment

  • A summary of IG Client Sentiment shows traders are net-long Gold - the ratio stands at +2.49 (71.3% of traders are long) – bearish reading
  • Long positions are 1.7% higher than yesterday and 6.3% lower from last week
  • Short positions are 10.7% lower than yesterday and 2.7% 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. Traders are more net-long than yesterday but less net-long from last week and the combination of current positioning& recent changes gives us a further mixed Gold trading bias from a sentiment standpoint.

--- Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

Other Weekly Technical Forecast:

AUD Forecast –Prices May Add Gains to USD, EUR But JPY Holds

British Pound Forecast –Light on the Horizon?

Equity Forecast –DAX Makes First Major Test, DJIA Gains Topping

Oil Forecast – Weak USD Gives Oil Biggest Weekly Gain in 2 Years

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