Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Gold Price Forecast: Gold Recovers from Flash Crash, $1,800 Remains Critical

Gold Price Forecast: Gold Recovers from Flash Crash, $1,800 Remains Critical

Tammy Da Costa, Analyst

Gold Technical Forecast: Neutral

  • Gold bulls strike back after brutal flash crash to open the week
  • Inflation, Sentiment and Earnings remain key catalysts for commodity prices
  • XAU/USD pushes towards psychological $1,800
Gold Forecast
Gold Forecast
Recommended by Tammy Da Costa
Download our fresh Q3 Gold Forecast
Get My Guide

Gold prices have rebounded after the flash crash on the weekly open saw prices plunge to the $1,680 swing low. After pricing in the brutal sell-off, price action turned positive, allowing Gold bulls the opportunity to drive price action back towards the key psychological level of $1,800 which remains critical to both the imminent and longer-term move.

With company earnings and better than expected US economic data (including last week’s NFP report) supporting optimism of an economic recovery and riskier assets, rising concerns over the spread of the Delta variant prevented bears from driving prices below the 2021 as US Dollar strength eased.

As prices continue to test critical levels of support and resistance, this week’s FOMC Meeting Minutes may further assist in the catalyzation of price action over the next few weeks as inflationary concerns continue to mount. For this reason, Federal Reserve Chair Jerome Powell remains a potential focal point for Gold traders as his commentary could impact the direction of the trend.

DailyFX Economic Calendar

Gold Technical Analysis

After rebounding off of the 61.8% Fibonacci retracement level of the 2020 move which continues to hold as support at $1,680, Gold bulls are facing a strong wall of confluent resistance, which includes the upper bound of the descending channel that has been forming since prices peaked in August last year. As demonstrated on the weekly chart below, bulls have a number of potential stumbling blocks ahead should the bullish trend continue to further recover prior losses.

To learn more about price action or chart patterns, check out our DailyFX Education section.

Given the intermediate-term bearish backdrop, with the June sell-off still looming large in Gold markets which runs counter to the strength shown this week upon the test of the 2021 low, the forecast will be set to neutral for the week ahead.

Building Confidence in Trading
Building Confidence in Trading
Recommended by Tammy Da Costa
Building Confidence in Trading
Get My Guide

Gold (XAU/USD) Weekly Chart

Chart prepared by Tammy Da Costa using TradingView

Currently, critical levels remain at the above-mentioned moves between $1,680 and $1,800.

For the short-term move, immediate support currently remains at $1,762 (the 50% retracement of the 2020 move), with the next support level holding at $1,744 (the 23.6% retracement of the 2021 move). A break below this level could see bears driving prices back towards the $1,680 handle.

Top Trading Opportunities in Q4
Top Trading Opportunities in Q4
Recommended by Tammy Da Costa
Discover our analyst’s Top Trading Opportunities for Q3
Get My Guide

Gold (XAU/USD) Daily Chart

Chart prepared by Tammy Da Costa using TradingView

Contrary to this, a break above the channel formation and above $1,800 could see the next big level of resistance coming into play at $1,835, the 38.2% retracement of the 2020 move.

--- 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.

DISCLOSURES