Gold Short-term Outlook: XAU/USD Recovery Eyes Pivotal Resistance
Gold prices surged more than 4.3% this week with a four-day rally now threatening the October downtrend. Battle lines drawn on the XAU/USD technical charts.
Share this:
Gold Technical Outlook: XAU/USD Short-term Trade Levels
- Gold price recovery poised to mark fourth-daily advance- up nearly 5.4% off monthly low
- XAU/USD rebound approaching downtrend resistance- risk for exhaustion / price inflection ahead
- Resistance 2663/72, 2693 (key), 2735/43- Support 2594-2602 (key), 2563, 2531/33
Gold prices surged more than 4.3% since the start of the week with a four-day rally now threatening the late-October downtrend. Battle lines drawn on the XAU/USD short-term technical charts.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this gold technical setup and more. Join live on Monday’s at 8:30am EST.
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 had was threatening the August rally with the, “medium-term threat for a larger correction with the broader uptrend. From a trading standpoint, rallies would need to be limited to the monthly open IF price is heading lower on this stretch with a close below 2672 needed to keep the immediate short-bias viable.” Gold broke lower days later with the post-election sell-off plunging more than 9% off the October / record high.
Gold registered an intraday low last week just ahead of highlighted support at August high / 50% retracement of the May rally near 2531/33. The subsequent rebound is now poised to mark fourth-consecutive daily advance with gold now within striking distance of key 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 a descending pitchfork we’ve been tracking off the October high. Note that the 1.382% extension of this slope caught the lows last week with the inverse extension now converging on key Fibonacci resistance just higher.
Initial resistance is being tested today at the 50% retracement of the late-October decline / September high-day close (HDC) at 2663/72 with near-term bearish invalidation now lowered to the 61.8% retracement at 2693- a breach / close above this threshold would suggest a more significant low was registered last week / invalidate the multi-week downtrend. Subsequent resistance objectives eyed at the 78.6% retracement / record HDC / November open at 2735/44 and 2787-2804.
Initial support rests with the 38.2% retracement / October low at 2594-2602 and is backed by the objective weekly open at 2563. A break below this level would threaten downtrend resumption towards 2531/33- look for a larger reaction there again IF reached. The next major support zone comes in at 2469/83- a region defined by the July high-close, the 61.8% retracement, and the July swing high (area of interest for possible downside exhaustion / price inflection IF reached).
Bottom line: A recovery off downtrend support is now approaching downtrend resistance- risk for price inflection here. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to 2594 IF price is heading for a breakout with a close above 2693 needed to suggest a low is in place.
Keep in mind we get the release of key US inflation data next week ahead of the monthly cross. Stay nimble into the releases and watch the weekly closes here for guidance. Review my latest Gold Weekly Technical Forecast for a closer look at the longer-term look at the XAU/USD trade levels.
Key Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Short-term Technical Charts
- Canadian Dollar Short-term Outlook: USD/CAD Trump Rally Unravels
- Japanese Yen Short-term Outlook: USD/JPY Bears Charge Uptrend Support
- Swiss Franc Short-term Outlook: USD/CHF Bulls Relent at Resistance
- British Pound Short-term Outlook: GBP/USD in Freefall- Support Ahead
- Euro Short-term Outlook: EUR/USD Breakdown Searches for Support
- US Dollar Short-term Outlook: USD Trump Bump Extends into Resistance
- Australian Dollar Short-term Outlook: AUD/USD Bears Go for the Break
--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com
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
Dow Jones Slide Shows What Rate Hike Bets Mean for Stocks
The Dow Jones support breakdown shows rising bond yields and rate hike bets hitting U.S. stocks while tech giants prop up the Nasdaq.
EUR/USD forecast remains tilted lower with French bond troubles ahead of US jobs report
The EUR/USD has tagged a fresh year-to-date low as French public-finance concerns trigger a government bond sell-off. Today's US jobs report may change little, with resilient activity, elevated energy prices and hawkish Fed bets keeping the greenback supported. With the pair trapped below resistance at 1.1410, the risk to the near-term EUR/USD forecast is tilted to the downside.
What Stretched 10-Year Yields Mean for Major Currency Pairs in Q4
U.S. 10-year Treasury yields are nearing a long-term resistance zone with overbought RSI readings, raising near-term pullback risk for the dollar.
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.