Gold Price Outlook: XAU/USD Recovery Eyes Resistance- GLD Levels
- Gold prices rebound off key support zone- recovery in focus with resistance eyed at 1490
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Gold prices are reversed course last week with XAU/USD rebounding off a key support zone we’ve been tracking for months now. The recovery is in focus this week as the bulls attempt to reassert their footing. These are the updated targets and invalidation levels that matter on the XAU/USD weekly chart. Review my latestWeekly Strategy Webinar for an in-depth breakdown of gold this setup and more.
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Gold Price Chart - XAU/USD Weekly
Notes: In my last Gold Price Weekly Outlook we noted that the plunge in XAU/USD was, “testing the first major hurdle and the immediate focus is on key support at 1451/61 with the short-bias vulnerable while above this threshold.” Price briefly registered a low at 1445 before reversing sharply with bullion up more-than 1.7% off the lows.
Gold has been testing multi-year median-line resistance for the past two weeks with more significant resistance eyed at the highlighted trendline confluence around ~1490 – a breach / close above this threshold would be needed to validate a larger reversal with such a scenario targeting another run on 1522/26. A break below critical support here at 1451/56 would risk accelerated losses for gold with subsequent support objectives eyed at the median-line / 100% extension at 1420- look for a bigger reaction there IF reached.
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Bottom line: Gold is responding to a key support zone here and the immediate focus is on this rebound. From at trading standpoint, looking sideways to higher from here – I’ll be looking for a reaction closer to 1490s IF reached or guidance. 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
- A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +2.83 (73.9% of traders are long) – bearishreading
- Long positions are2.10% lower than yesterday and 6.87% lower from last week
- Short positions are 1.73% lower than yesterday and 7.58% 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 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!
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--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.