Gold Price Forecast: XAU/USD Breakout Looms

Gold Technical Forecast: XAU/USD Weekly Trade Levels

• Gold coils within multi-month consolidation pattern, just below resistance
• XAU/USD poised for September breakout- Core PCE on tap
• Resistance 3432/35, 3500 (key), 3590s– Support 3247, 3121/32 (key), 3000

Gold has spent months consolidating below a critical resistance threshold, and pressure is building into September. A breakout looms, with bulls eyeing another test of the record high if price clears the ceiling. Battle lines drawn on the XAU/USD weekly technical chart into the close of the month.

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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 XAU/USD, “was rejected at resistance again this week and the monthly opening-range reversal keeps the focus on a test of the yearly uptrend- watch today’s close with respect to the median-line.” Gold tested the median-line numerous times this month with price unable to mark a weekly close below the February trendline (red).  The focus remains on a breakout of this multi-month consolidation pattern just below technical resistance at the objective May high / weekly high-close at 3432/35.

Initial support rests along the February trendline (currently ~3350) and is backed by the 61.8% retracement of the May advance at 3247. Bullish invalidation remains with the May swing low / 38.2% retracement of the November advance at 3121/32 – note that the lower parallel of a multi-year pitchfork converges on this threshold over the next few weeks and a break / close below would be needed to suggest a more significant high is in place / a lager trend reversal is underway.  

A topside breach / close above this resistance pivot exposes the record high at 3500- look for a larger reaction there IF reached. Subsequent resistance objectives eyed at the upper parallels, currently near ~3590s and ~3750s.

Bottom line: Gold is attempting to breakout of a multi-month consolidation pattern, just below resistance. From a trading standpoint, losses would need to be limited to the February trendline IF price is heading higher on this stretch with a close above 3432 needed to fuel a test of the record high.

Keep in mind we get the release of key U.S. inflation data this week with the Core Personal Consumption Expenditure (PCE) on tap Friday. Stay nimble into the monthly cross 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

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