Gold Price Forecast: XAU/USD Surges to Resistance- Bulls to Face Fed
Gold marked a fourth weekly advance with price stalling into resistance at record highs ahead of the Fed. Battle lines drawn on the XAU/USD weekly technical chart.
Share this:
Gold Technical Forecast: XAU/USD Weekly Trade Levels
- Gold breakout marks fourth-consecutive weekly advance- rally stalls into resistance
- XAU/USD bulls face key test with FOMC decision on tap next week
- Resistance 3666, ~3730s, 3782 (key)– Support 3500, 3432 (key), 3240
Gold prices have advanced for four straight weeks, with XAU/USD stalling into resistance at fresh record highs. The focus now shifts to the FOMC interest rate decision next week and while the broader outlook remains constructive, the immediate advance may be vulnerable in the near-term. Battle lines drawn on the XAU/USD weekly technical chart into the Fed.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this gold setup and more. Join live on Monday’s at 8:30am EST.
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, “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.” Gold broke higher that week with the rally extending nearly 11% off the August low. A four-week rally was halted at technical resistance this week and the immediate advance may be vulnerable heading into FOMC rate decision- risk for infection off this mark.
Initial resistance is eyed at the 300% extension of the 2011 decline at 3666, backed by the upper parallel (currently near ~3730s), and the 1.618% extension of the May advance at 3782- both areas of interest for possible topside exhaustion / price inflection IF reached.
Initial support now rests with the April high at 3500 and is backed by the June high-close / Amy high at 3432- note that the February trendline converges on this threshold over the next few weeks and further highlights the technical significance of this breakout level (area of interest for downside exhaustion IF reached). Broader bullish invalidation now raised to the 38.2% retracement of the yearly range at 3240.
Bottom line: The gold breakout has extended into initial resistance, and the four-week rally may be vulnerable heading into the Fed next week. 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.
Keep in mind we get the release of the Federal Reserved updated Summary of Economic Projections on Wednesday as they pertain to growth, inflation and the employment. Expect some volatility here- stay nimble into the release and 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.
Key US Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Weekly Technical Charts
- US Dollar Index (DXY)
- Euro (EUR/USD)
- Canadian Dollar (USD/CAD)
- British Pound (GBP/USD)
- Japanese Yen (USD/JPY)
- S&P 500, Nasdaq, Dow
- Swiss Franc (USD/CHF)
- Australian Dollar (AUD/USD)
- Crude Oil (WTI)
--- Written by Michael Boutros, Sr Technical Strategist
Follow Michael on X @MBForex
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Nikkei breakout accelerates as yen weakness returns
Nikkei has started October with a powerful breakout, helped by renewed yen weakness and strong upside momentum
AUD/USD hammered by US yields and fading RBA hike bets
US yields, dollar strength and fading RBA hike bets have combined to drive AUD/USD to fresh multi-month lows. The macro and technical bias remains bearish, although history suggests parts of the move are now reaching unusually stretched levels.
Gold Price Outlook: XAU/USD Resistance at $4200 Sets Up for NFP
It was a strong sell-off to start the week in gold and despite a Tuesday bounce, sellers are continuing to push following a resistance hit at the $4200 level.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.