Gold analysis: Will XAU/USD’s resilience hold?
Gold’s resilience this week has been remarkable in the face at least two bearish factors, namely the US government re-opening and US-China trade truce, being removed. Despite the recovery, and everyone being so bullish on gold prices, could we now see some pressure emerge to put a slightly bearish tilt to the gold analysis heading into the latter stages of the week? Objectively speaking, I think we should be expecting that, but price action hasn’t shown any hints of bearish characteristics thus far this week. Will that change?
Gold analysis: should gold be heading lower?
Well, gold is up for the fifth day today and momentum has clearly been there to underpin prices this week. But I am at least a tiny bit surprised how resilient gold has been in the last few days when you consider the fact we have had some bearish influences to take into account. Among other things, the most obvious being the government re-opening, which was being priced in the stock markets in the last few days. Meanwhile, the US and China recently agreed on a trade truce, which is another risk-positive development.
So, with both of these two factors you’d expect that would remove some haven demand from gold. Well, so far, there is not much evidence of that, which can only mean one thing: people are still expecting to see continued central bank buying. That is another risky assumption as even central banks might be wary of overcooked prices here.
So, at just below $4250 resistance, I would be cautious to chase this rally here after a 5-day winning run and given the reduction of bearish macro factors mentioned. Therefore, I would actually be on the lookout for a bit of profit-taking to take prices back down to near $4K level in the coming days and weeks. So far, though, there are no signs of any bearish price action.
Technical gold analysis and key levels to watch
From a technical standpoint, the chart of gold is still bullish but with the metal now entering a key area between $4200 to $4250, one needs to be careful chasing this rally. Here, gold is testing a prior support area that gave way during that big sell-off on 21st October, when a breakout to a new record was sharply rejected. That marked a turning point in gold’s direction for the next several days and prompted us to declare at least a temporary top in the gold forecast. Whether or not we are still in that temporary phase concerning gold’s direction remains to be seen. But a lot will now depend on what gold does here. This is where the sellers really need to step in again after their efforts at the back end of last month to suppress gold prices.
Let’s assume that we will see some selling activity here. In this scenario, gold may then drop to test the next support level around $4140 to $4150 area. But if that area also gives way, then a quick drop to $4,000 would be my next best guess.
On a side note, the monthly gold price chart is still technically extremely overbought, and it will need a long period of time to undoing from those extremes. Therefore, in the grand scheme of things, even if we do see some two-way volatility here, and drop in gold prices to say slightly below $4K in the months ahead, this will all be considered a pullback in the long term trend.
But focusing back to the short term, let’s see first and foremost whether the sellers will show up again or will they succumb to the momentum and instead see new highs in gold prices.
Meanwhile, in from a bullish gold analysis point of view if resistance fails to hold here and we push through it, then $4,300 is the next upside target ahead of $4,400 next, which would mark a new high for gold should we get there.
-- Written by Fawad Razaqzada, Market Analyst
Follow Fawad on Twitter @Trader_F_R
From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.
FOREX.com is a trading name of StoneX Financial Pty Ltd.
The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.
While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.
StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.
It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.
StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.
Delayed London Stock Exchange (LSE) Data
The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.
© FOREX.COM 2026