Gold Price Forecast: XAU/USD Snaps 7 Week Rally- Elections/Fed Ahead
Gold prices marked the first weekly loss since September with XAU/USD stalling near record highs. Battle lines drawn on the weekly technical chart into US Elections/Fed.
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Gold Technical Forecast: XAU/USD Weekly Trade Levels
- Gold breakout marks seven-week rally into uptrend resistance- first weekly loss since early-September
- XAU/USD risk for exhaustion / price inflection into November- US Elections, RBA, BoE, Fed on tap
- Resistance 2804 (key), 2900, 3000/031– Support 2643/71, 2602 (key), 2524
Gold prices are set to snap a seven-week winning streak on Friday despite rallying to fresh record highs this week. XAU/USD rallied nearly 3.9% in October with prices now up more than 33.8% year-to-date. The rally extended into uptrend resistance this week and while the broader outlook remains constructive; the immediate advance may be vulnerable into the start of the month. Battle lines drawn on the XAU/USD weekly technical chart into a historic week of event risk.
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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 Weekly Price Forecast we noted that the XAU/USD breakout was approaching the, “next major technical consideration at the 2.618% extension of the 2022 decline near 2804- note that a slope parallel (red) converges on this threshold over the next few weeks and we’ll be looking for a larger reaction there IF reached.” Gold registered an intraweek high at 2790 on Wednesday before turning sharply lower with price now poised to snap a seven-week winning streak.
We’ve adjusted our slope to the pitchfork extending off the 2022 / 2023 lows with the upper parallel highlighting the potential exhaustion into uptrend resistance this week. Note that weekly momentum is coming off the highest levels registered since 2019- that year marked a breakout of multi-year resistance to fresh record highs. That said, RSI remains deep in overbought territory (currently 79.5) and pullbacks are likely to be shallow so long as this condition persists.
Initial support remains unchanged at 2643/71 backed by the objective October low at 2602- both levels of interest for possible downside exhaustion / price inflection IF reached. Bullish invalidation now raised to the 200% extension of the 2022 range and the origin of the September breakout at 2524.
A topside breach / close above 2804 is needed to mark uptrend resumption / fuel the next leg of the advance with subsequent resistance objectives eyed at 2900 and 3000/32- a region defined by the 2.272% extension of the 2011 decline and the 2.618% extension of the 2022 advance. Look for a larger reaction there IF reached.
Bottom line: A seven-week rally in Gold takes XAU/USD into proposed uptrend resistance this week and while the broader outlook remains constructive, the immediate advance may be vulnerable into the November open. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses should be limited to 2600 IF price is heading higher on this stretch with a close above 2804 needed to fuel the next leg of the rally.
Note that we have major event risk early in the month with the US Presidential Election and the RBA / BoE / Fed interest rate decisions on tap next week. Stay nimble into the releases and watch the weekly close for guidance here. 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 with FOREX.com
Follow Michael on X @MBForex
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