Gold Price Forecast: XAU/USD Holds Yearly Support—Major Low Forming?

Gold Technical Forecast: XAU/USD Weekly Trade Levels

• Gold has stabilized above a major support zone after plunging to a fresh yearly low earlier this month.
• The recovery faltered at the yearly open and keeps the focus on a breakout of the monthly range for directional guidance.
• Weekly momentum has flat-lined at the lowest levels since the 2023 yearly low, raising the threat of a larger exhaustion low.
• The April downtrend remains vulnerable while above the monthly low with a breach above of the June open is needed to build a larger recovery in the weeks ahead.
• Key inflation data next week with Core PCE on tap Thursday
• Resistance 4319, 4492-4540 (key), 4894- Support 4074-4112 (key), 3887, 3570

Gold is attempting to stabilize above a critical support zone near the yearly lows after a sharp multi-week selloff drove momentum to its weakest levels in years. Despite briefly probing below key support, sellers have thus far failed to secure a weekly close beneath this region, raising the possibility that a more significant exhaustion low may be forming. With XAU/USD now testing long-term trend support at the 52-week moving average, the focus shifts to whether buyers can build on this defense and begin carving out a larger recovery. Battle lines drawn on the XAU/USD weekly technical chart.

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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 my last Gold Technical Forecast we noted that XAU/USD was testing yearly open support the with momentum falling to the lowest levels since 2023 and that, “From a trading standpoint, rallies should be limited to 4533 IF price is heading lower on this stretch with a close below 4319 needed to fuel the next major leg of the decline.” Gold broke sharply lower the following week with price plunging another 6.6% before exhausting near technical support at 4074-4112- a region defined by the 61.8% extension March decline, the 2026 yearly low, and the October high-week reversal close. Note that the 52-week moving average converges on the 25% parallel of the 2024 upslope and despite a deep probe below, the bears have yet to mark a weekly close below. The risk that a more significant low may have been registered is prominent and the April downtrend remains vulnerable while above this key pivot zone.

Yearly open resistance is just overhead at 4319 with 4493/4540 still critical. This zone is defined by the March low-week close (LWC), the April lows, the 2025 high-close, and the objective monthly open. Note that the slope resistance converges on this threshold over the next few weeks and a breach / weekly close above this pivot zone would be needed to suggest a near-term low is in place and a larger trend reversal is underway. Subsequent resistance eyed at the April swing high and the record high-week close at 4890/94.

A break / weekly close below 4074 would threaten another bout of losses towards the October swing lows near 3887. Note that slope support converges on this level into close of the month and losses below this threshold would threaten a test of the longer-term, multi-year uptrend. Subsequent support rests with the 2024 trendline which converges on the 100% extension of the March decline next week at 3570. Both levels represents areas of interest for possible downside exhaustion / price inflection IF reached.

           

 

Bottom line: Gold is trading into uptrend support at the yearly moving average, just above the yearly lows. From a trend standpoint, the threat rises for an exhaustion low in the weeks ahead and the short-exposure should be approached carefully at these levels. From a trading standpoint, losses would need to be limited to 4074 IF price is heading for a larger recovery with a breach above 4540 needed to suggest a more meaningful reversal is underway.

Keep in mind we get the release of key U.S. inflation data next week with the May Core Personal Consumption Expenditures (PCE) on tap Thursday. In his first press conference as Fed Chair, Kevin Warsh re-affirmed his commitment to stabilizing prices even as the central bank projections showed a marked upward revision to the 2026 inflation outlook to the tune of 3.3% on core and 3.6% on headline. The SEP suggests the committee sees a deeper, more entrenched inflationary cycle, beyond just the recent energy shock. Oil prices have plunged more than 38% off the yearly high with news of a US-Iran agreement easing concerns over a prolonged disruption to commercial traffic in the Strait of Hormuz.

Source: Federal Reserve

While rising inflation expectations have historically provided support for gold, the recent surge in the U.S. dollar—driven by growing expectations for tighter monetary policy—has continued to weigh on prices. The DXY has extended its advance to fresh yearly highs this week, increasing headwinds for the precious metal. Should next week's inflation data surprise to the upside, the Fed could face mounting pressure to tighten policy in the months ahead. Interest rate markets are currently pricing in roughly a 70% probability of a 25-basis-point rate hike in September. Look for a strong gold response with XAU/USD at risk for another bout of losses IF this support breaks. 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, Senior Technical Strategist

Follow Michael on X @MBForex