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Gold Price Forecast: Gold Rally at Key Chart Hurdle– XAU/USD Levels

Gold Price Forecast: Gold Rally at Key Chart Hurdle– XAU/USD Levels

Michael Boutros, Strategist

Gold Technical Price Outlook: XAU/USD Weekly Trade Levels

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Gold prices have rallied towards a key resistance zone we’ve been tracking for weeks now and we’re looking for possible price inflection into the close of the month for guidance with US non-Farm Payrolls on tap this Friday. The battle-lines are drawn for the bulls heading into this threshold. These are the updated targets and invalidation levels that matter on the XAU/USD weekly technical chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this gold technical setup and more.

Gold Price Chart - XAU/USD Weekly

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

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

Notes: In last month’s Gold Weekly PriceOutlook we noted that the XAU/USD, “price collapse has responded to a critical technical support zone at the objective yearly lows- looking for the inflection off this zone to offer guidance.” The highlighted zone in focus was , “at the 1670/82 support confluence- a region defined by the 61.8% extension of the 2020 decline, the objective yearly opening-range low and the 38.2% retracement of the 2015 advance.” Bullion has rallied more than 8.5% off that low with price now approaching a key resistance confluence at 61.8% Fibonacci retracement of the June decline the 52-week moving average at 1825/28- note that the upper parallel also converges on this region this week and further highlights the technical significance of this resistance zone.

Weekly support rests at 1755- intra-week los ses should be limited to this threshold on pullbacks IF price is indeed heading higher. Critical support unchanged at 1670/82. Ultimately, a breach / close above the yearly high-week close at 1849 is needed to shift the broader focus higher again with such a scenario exposing topside objectives into the yearly highs at 1909/23.

Bottom line: The multi-week gold price rally is now testing the first major hurdle at downtrend resistance. From a trading standpoint, look to reduce long-exposure / raise protective stops on a stretch into 1825/28- be on the lookout for downside exhaustion ahead of 1755 with a close above 1849 needed to mark resumption of the broader uptrend. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trade 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 Retail Positioning - GC Technical Outlook
  • A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +2.11 (67.90% of traders are long) – typically bearishreading
  • Long positions areunchanged from yesterday and 9.14% lower from last week
  • Short positions areunchanged from yesterday and 10.91% 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 less net-long than yesterday but more net-long from last week. The combination of current positioning and recent changes gives us a further mixed Gold trading bias from a sentiment standpoint.

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Previous Weekly Technical Charts

- 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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