Gold Short-term Outlook: XAU/USD October Range Breakout Imminent

Gold Technical Outlook: XAU/USD Short-term Trade Levels

• Gold stalling into technical resistance near record high- rally vulnerable while below
• XAU/USD October opening-range set – breakout imminent
• Resistance 2672 (key), 2700, 2743- Support 2589-2602, 2550s, 2529 (key)

Gold prices are stalling into the September record high for a fourth consecutive week with the October opening-range now set just below technical resistance. While the broader outlook remains constructive, the immediate advance may be vulnerable while below this pivot zone. Battle lines drawn on the XAU/USD short-term technical charts.

Gold Price Chart – XAU/USD Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; XAU/USD on TradingView

Technical Outlook: In my last Gold Short-term Price Outlook we noted that XAU/USD was, “trading just below uptrend resistance into the start of the month with the weekly opening-range taking shape just below. From at trading standpoint, the focus is on a near-term breakout for guidance- losses should be limited to 2589 IF price is heading higher on this stretch with a close above 2700 needed to fuel the next major leg.” Gold fell more than 2.5% in the following days with price registering an intraday low at 2602 before rebounding sharply with the monthly opening-range now set just below resistance.

Gold Price Chart – XAU/USD 240min

Chart Prepared by Michael Boutros, Sr. Technical Strategist; XAU/USD on TradingView

Notes: A closer look at gold price action shows XAU/USD continuing to trade within the confines of the ascending pitchfork we’ve been tracking off the April / June lows. Monthly-open support rests at 2634 and is backed by the October low / 23.6% retracement of the May advance at 2589-2602. Note that the median-line converges on this threshold over the next few days and a break / close below this slope is needed to suggest a larger correction is underway within the broader uptrend. Subsequent support seen at the 75% parallel (currently ~2550s) and the 38.2% retracement at 2529- losses would need to be limited to this level for the June uptrend to remain viable.

Key resistance remains with the record high-day close (HDC) / 1.618% extension of the June rally at 2672. A topside breach / close above this threshold is needed to fuel the next leg of the advance towards subsequent resistance objective at 2700 and the 200% extension of the 2022 advance at 2743- look for a larger reaction there IF reached.

Bottom line: Gold has set the October opening-range just below resistance at the record high-day close. The immediate focus is on a breakout of the weekly opening-range for guidance here with the immediate advance vulnerable sub-2672. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to the median-line IF price is heading higher on this stretch with a close above this pivot zone needed to fuel the next leg of the advance. Review my latest Gold Weekly Technical Forecast for a closer look at the longer-term look at the XAU/USD trade levels.  

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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on X @MBForex