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Gold Price Targets: XAU/USD at Risk for Further Losses- GLD Outlook

Gold Price Targets: XAU/USD at Risk for Further Losses- GLD Outlook

2019-10-11 13:30:00
Michael Boutros, Technical Strategist
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Gold prices are lower this week with the precious metal down more-than 1.3% to trade at 1484 ahead of the New York close on Friday. The risk remains for further losses after turning from long-term uptrend resistance last month and we’re looking for a reaction lower down. These are the updated targets and invalidation levels that matter on the XAU/USD charts this week. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this setup and more.

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Gold Price Chart - XAU/USD Weekly

Gold Price Chart - XAU/USD Weekly - GLD Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview

Notes: In my last Gold Weekly Price Outlook we noted that XAU/USD remained, “at risk for further losses while below uptrend resistance here – form at trading standpoint, looking lower for now with a deeper set-back to offer more favorable long-entries closer to trend support.” Nearly three weeks later and prices have remained on the defensive with gold pulling away from critical resistance at 1522/26 – a region where the late-2011 / 2012 swing lows converges on longer-term slope resistance.

Initial support rests with the 75% parallel of the broader ascending pitchfork formation we’ve been tracking off the 2016 / 2018 lows (currently ~1475). Key medium-term support stands at 1451/61- look for a bigger reaction there IF reached with a break / weekly close below needed to suggest a more significant correction is underway. Note that RSI is attempting to close the week below the 70-threshold and further highlights the threat of a broader turn in the momentum profile. Ultimately, a topside breach above 1526 is needed to mark resumption targeting subsequent resistance objectives at 1558 and 1586.

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

Bottom line: Gold prices remain vulnerable after reversing off long-term trend resistance. From at trading standpoint, the risk remains for a deeper pullback towards uptrend support – look for reduce short exposure / lower protective stops on a test of key support at 1451/61 – we’ll reassess the price reaction there IF reached. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trading levels.

Gold Trader Sentiment – XAU/USD Price Chart

Gold Trader Sentiment - XAU/USD Price Chart - GLD Technical Forecast
  • A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +2.12 (67.9% of traders are long) – bearishreading
  • Long positions are5.11% higher than yesterday and 0.45% higher from last week
  • Short positions are8.10% lower than yesterday and 2.58% lower 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 further net-long than yesterday and 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!

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Previous Weekly Technical Charts

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

Follow Michael on Twitter @MBForex

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

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