Never miss a story from Michael Boutros

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Michael Boutros

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Gold prices have plummeted nearly 6% from the yearly high with today’s decline taking prices into multi-month trend support at fresh yearly lows. These are the updated targets and invalidation levels that matter on the XAU/USD charts this week. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

New to Gold Trading? Get started with this Free How to Trade Gold -Beginners Guide

Gold Daily Price Chart (XAUUSD)

Gold Price Chart - XAU/USD Daily - GLD

Technical Outlook: In my latest Gold Weekly Technical Outlook we noted that, “While a break of the monthly opening-range lows does keep the focus lower into the close of April,” price was approaching major support into fresh yearly lows. A break below the 1275/76 support zone was halted today at the August trendline support and leaves the immediate short-bias vulnerable while above this slope.

So, did Gold just bottom? A breach / close back above the yearly opening-range low at 1276 would be needed to alleviate further downside pressure targeting the January trendline (currently ~1285) backed by broader bearish invalidation at the 100-day moving average / monthly open at 1290/92. A downside break would keep the short-bis viable targeting more significant support at 1253/58- a region defined by the 100% extension of the yearly decline and the 50% retracement of the late-2018 advance. Look for a bigger reaction there IF reached.

Why does the average trader lose? Avoid these Mistakes in your trading

Gold 120min Price Chart (XAUUSD)

Gold Price Chart - XAU/USD 120minute - GLD

Notes: A closer look at price action shows Gold trading within the confines of a descending pitchfork formation extending off the March / April highs with price responding to confluence support today at the lower parallel. It’s a make-or-break here.

A breach above near-term resistance targets the yearly open at 1280 backed closely by the median-line / 38.2% retracement at 1283 – a rally surpassing this threshold would be needed to shift the near-term focus higher targeting the monthly open & the upper parallels.

Learn how to Trade with Confidence in our Free Trading Guide

Bottom line: Gold has responded to near-term down-trend support and leave the immediate decline vulnerable while above today’s low. From a trading standpoint, good spot to reduce short-exposure and lower protective stops – be on the lookout for possible exhaustion off this low with a close above 1283 needed to suggest a near-term recover is underway. Continued weakness would keep the focus on 1258. Review our latest Gold 2Q forecasts for a longer-term look at the technical picture for XAU/USD prices.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Gold Trader Sentiment

Gold Trader Sentiment - XAU/USD Price Chart - GLD Positioning
  • A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +2.68 (72.8% of traders are long) – bearishreading
  • The percentage of traders net-long is now its lowest since April 9th
  • Long positions are6.5% lower than yesterday and 6.6% lower from last week
  • Short positions are 0.9% higher than yesterday and 13.2% 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. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Gold (XAU/USD) price trend may soon reverse higher despite the fact traders remain net-long.

See how shifts in Gold retail positioning are impacting trend- Learn more about sentiment!

---

Active Trade Setups

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex