Gold Price Forecast – XAU/USD Trading Around Big Resistance
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Gold Price Technical Outlook: Neutral
- Gold struggling around an important area of resistance
- Levels, lines, and scenarios to watch in the days ahead
Gold Price Forecast – XAU/USD Testing Big Level of ‘Hidden’ Support
Last week gold shot higher, but quickly found itself at an important area of resistance. Dating to the summer gold has bumped up against the low 1830s on four occasions. The most recent instance occurring just a couple of weeks ago.
If gold can’t get over resistance in a convincing fashion soon, then look for a turn lower and more choppy price action to ensue. A turn lower would quickly have the 200-day moving average in play again at 1802, but this widely-watched average is quickly losing its impact as gold chops back and forth around it.
On the top-side, though, a breakout and close into the upper 1830s or better on a daily basis could get gold into gear. There are a couple of trend-lines we will need to be mindful of right away. Trend-lines from August and November 2020 arrive between around 1850 and 1860.
A break above those lines will bring into view the November high at 1877 as the next level of resistance. Conviction is low, however, that we will see strong follow through. It’s been a while since gold has been a market of conviction in either direction, so until it provides some evidence of changing regimes I will remain skeptical.
The play that could be of interest is if we see gold pierce through resistance in the low-mid 1830s and then quickly fail back below. This could set up near-term minded traders with a short opportunity that is consistent with the overall directionless behavior gold has been displaying.
Gold Price Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.