Gold Price Coils Above 50-Day SMA
The price of gold seems to be coiling above the 50-Day SMA ($3042) as it defends the weekly low ($3260).
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Gold Price Outlook: XAU/USD
The price of gold is little changed since the start of the week after hitting a fresh record high ($3500), but bullion seems to be coiling above the 50-Day SMA ($3042) as it defends the weekly low ($3260).
Gold Price Coils Above 50-Day SMA
In turn, the price of gold may continue to track the positive slope in the moving average as it still holds above the indicator, and the ongoing transition in US trade policy may keep the price of gold afloat as it offers an alternative to fiat-currencies.
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With that said, the range bound price action in gold may turn out to be temporary as the threat of a trade war clouds the outlook for the global economy, but failure to defend the weekly low ($3260) may lead to a further pullback in the precious metal as the Relative Strength Index (RSI) no longer reflects an overbought reading.
XAU/USD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; XAU/USD on TradingView
- Keep in mind, the recent weakness in the price of gold pulled the Relative Strength Index (RSI) below 70, and lack of momentum to hold above $3280 (100% Fibonacci extension) may push the precious metal back towards the $3160 (161.8% Fibonacci extension) to $3190 (78.6% Fibonacci extension) region.
- Next area of interest comes in around $3120 (61.8% Fibonacci extension), but failure to close below $3280 (100% Fibonacci extension) may keep the price of gold within the weekly range.
- At the same time, the price of gold may break out of the range bound price action as it appears to be defending the weekly low ($3260), with a breach above the monthly high ($3500) bringing $3540 (161.8% Fibonacci extension) back on the radar.
Additional Market Outlooks
Euro Forecast: EUR/USD Reverses Ahead of November 2021 High
Canadian Dollar Forecast: USD/CAD Cracks November Low Ahead of Election
GBP/USD Falls Ahead of 2024 High to Threaten Ten-Day Rally
AUD/USD Extends V-Shape Recovery to Push Above February High
--- Written by David Song, Senior Strategist
Follow on X at @DavidJSong
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