Gold Price Forecast: XAU/USD Hits Records- Eight Week Rally Runs Hot
Gold surged to record highs, with the overbought rally now approaching resistance hurdles on an eight-week advance. Battle lines drawn on the XAU/USD weekly chart.
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Gold Technical Forecast: XAU/USD Weekly Trade Levels
- Gold breakout marks eighth-consecutive weekly advance- surges to fresh all-time high
- XAU/USD poised for largest weekly advance in four-months- resistance hurdles in view
- Resistance 4084-4113 (key), 4308, 4583– Support 3859, 3782 (key), 3666
Gold prices surged to fresh record highs this week, with bulls attempting to secure an eighth consecutive weekly advance. The broader trend remains constructive, but the breakout is now approaching a zone of initial technical resistance where momentum may begin to waver. We are on the lookout for possible signs of exhaustion as price stretches toward this barrier, with the reaction here likely to define the near-term trajectory. The battle lines are drawn on the XAU/USD weekly chart, and the stakes couldn’t be higher.
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Gold Price Chart – XAU/USD Weekly
Chart Prepared by Michael Boutros, Sr. Technical Strategist; XAU/USD on TradingView
Technical Outlook: In last month’s Gold Technical Forecast we noted that a four-week rally in XAU/USD was approaching initial resistance and that, “from at trading standpoint, any losses should be limited to 3432 IF price is heading higher on this stretch with a close above 3666 needed to fuel the next major leg of the advance.” Gold broke higher the following week with XAU/USD now poised to mark an eighth-consecutive weekly advance and the largest weekly range / rally since May. Weekly momentum has now reached the highest level since August 2019 when the yearly highs was registered. That said, the bulls remain in control for now with the September breakout approaching initial resistance hurdles.
Initial weekly resistance is eyed at 4084-4113- a region defined by the 100% extension of the November rally / 2.618% extension of the April decline. Note that the 75% parallel of the January pitchfork converges on this threshold over the next two-weeks and the focus is on a reaction off this mark in the days ahead IF reached. A topside breach / weekly close above this pivot zone is needed to keep the immediate advance viable with subsequent topside objectives eyed at the 2.618% extension of the 2015 advance at 4308 and the 1.618% extension of the December rally at 4583.
Monthly-open support rests at 3859 and is backed by 1.618% extension of the May rally at 3782. Broader bullish invalidation now raised to the 300% extension of the 2011 decline at 3666- losses below this threshold would be needed to suggest a more significant high is in place / a larger trend reversal is underway.
Bottom line: The bulls are in control with breach of a multi-year uptrend now extended towards initial resistance hurdles. From a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards 4100- losses would need to be limited to 3782 IF price is heading higher on this stretch with a close above the 75% parallel needed to fuel the next major leg of the advance.
Keep in mind the economic docket remains light this week and traders will be closely monitoring developments regarding the ongoing government shutdown- watch the weekly closes here for guidance. Review my latest Gold Short-term Outlook for a closer look at the near-term XAU/USD technical trade levels.
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--- Written by Michael Boutros, Sr Technical Strategist
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