- Updated weekly technicals on Gold– risk for deeper pullback but looking for a low above 1253
- Check out our 2019 projections in our Free DailyFX Gold Trading Forecasts
- Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT
Gold prices are virtually unchanged this week with the precious metal trading at 1291 ahead of the New York close on Friday. These are the updated targets and invalidation levels that matter on the XAU/USD weekly chart. for an in-depth breakdown of this setup and more.
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Gold Weekly Price Chart (XAU/USD)
Notes: In my last Gold Weekly Technical Outlook we noted that price was, “While our broader outlook is still weighted to the topside, the risk remains for a move lower towards the yearly lows before resumption.” An early week rally saw XAU/USD register a high at 1310 before reversing sharply with price poised to post a weekly doji if we close at these levels.
The levels remain unchanged heading into next week with key near-term support steady at the 1275/76 - “where the objective yearly opening-range low converges on the 38.2% retracement of the 2018 advance and former pitchfork resistance. Key support and broader bullish invalidation rests at 1253/58 – both regions of interest for possible exhaustion / long-entries IF reached. Resistance stands at the yearly high-week close at 1327 with a breach / close above 1350 needed to keep the long-bias in play targeting 1366 and 1380/91”
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
The April opening-range is set with Gold trading at monthly open support into the close of the week. From a trading standpoint, the risk remains weighted to the downside while below 1302 but ultimately, a larger setback should offer more favorable entries closer to the year range lows with a breach above 1327 needed to validate the reversal. Review my latest Gold Price Technical 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 +3.2 (76.2% of traders are long) – bearish reading
- Long positions are2.3% higher than yesterday and 4.4% higher from last week
- Short positions are 11.1% lower than yesterday and 9.2% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices (XAU/USD) may continue to fall. Traders are further net-long than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger Gold-bearish contrarian trading bias from a sentiment standpoint.
See how shifts in Gold retail positioning are impacting trend- Learn more about sentiment!
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex