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Gold Price Targets: XAU/USD Range Breakout Imminent- GLD Outlook

Gold Price Targets: XAU/USD Range Breakout Imminent- GLD Outlook

2019-10-16 15:30:00
Michael Boutros, Technical Strategist
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Gold prices are virtually unchanged since the start of the week with XAU/USD setting a well-defined weekly opening range just below resistance. These are the updated targets and invalidation levels that matter on the XAU/USD charts this week. Review my latestWeekly Strategy Webinar for an in-depth breakdown of this gold price setup and more.

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

Gold Price Chart - XAU/USD Daily

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

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

Technical Outlook: In my latest Gold Price Outlook we noted that, “The recent gold price recovery is vulnerable here while below near-term downslope resistance,” with the risk lower while within this descending channel formation. XAU/USD fell nearly 2% in the following days with price holding just above monthly open support at 1472. The monthly opening-range is set just above a critical support confluence at 1451/61 and we’re looking for the break.

Gold Price Chart - XAU/USD 120min

Gold Price Chart - XAU/USD 120min - GLD Trade Outlook - Gold Technical Forecast

Notes: A closer look at gold price action shows XAU/USD continuing to trading within the confines of a near-term descending pitchfork formation extending off the late-September highs. The weekly opening-range has taken shape just below the upper parallel and we’re looking for the break to offer guidance. A topside breach / close above 1497 is needed to validate a near-term breakout targeting 1502- look for a reaction there IF reached.

Interim support rests with the October trendline (currently around ~1480) with a break / close below the monthly open / 78.6% retracement at 1472 needed to mark resumption of the broader downtrend targeting key confluence support at 1460/61.

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Bottom line: We’re looking for a break of the weekly opening-range in Gold prices with the risk lower while with the confines of this formation. From a trading standpoint, we’ll favor fading strength sub-1496 targeting a downside break of the monthly trendline. We’ll be on the lookout for downside exhaustion on a test of the 1460/61 key support zone IF reached. Review my latest Gold Price Weekly Outlook for a closer look at the longer-term XAU/USD technical trading levels.

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

Gold Trader Sentiment - XAU/USD Price Chart

Gold Trader Sentiment - XAU/USD Price Chart - GLD Trade Outlook - Gold Technical Forecast
  • A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +2.4 (70.62% of traders are long) – bearishreading
  • Long positions are9.07% higher than yesterday and 12.16% higher from last week
  • Short positions are2.87% lower than yesterday and 14.32% 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 sentiment and recent changes gives us a stronger Gold-bearish contrarian trading bias.

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

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- Written by Michael Boutros, 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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