Gold price forecast: Did XAU/USD Just Top?

Gold technical forecast: XAU/USD weekly trade levels

Gold prices rally to record high on FOMC – closes week more than 3% off the highs
XAU/USD testing uptrend on building divergence- risk for correction
Gold resistance 2035, 2075/81, 2149 – support 1959, 1926 (key), 1891-1903

Gold prices rocketed to a fresh record high this week, but the advance quickly fizzled with XAU/USD closing more than 3% off the highs. While the broader outlook remains constructive, building divergence into technical resistance once again highlights the threat of corrective price action within the uptrend. These are the updated targets and invalidation levels that matter on the XAU/USD weekly technical chart.

Discuss this gold setup and more in the Weekly Strategy Webinars on Monday’s at 8:30am EST.

Gold Price Chart – XAU/USD Weekly

Chart Prepared by Michael Boutros, Technical Strategist; XAU/USD on TradingViews

Technical Outlook: In last month’s Gold Weekly Price Forecast we note that XAU/USD was trading just below the yearly high-week close and that, “A topside breach / weekly close above 2004 is needed to fuel another test of the record high-week close at 2035 and the record high at 2075- look for a larger reaction there IF reached.” Prices ripped higher this week on the heels of the FOMC rate decision with Gold briefly ripping to a fresh record high (registered at 2081) before pulling back sharply into the close of the week.

The move suggests another failed attempt to mount the record high with a close back below the record 2020 high-close at 2035 once again threatening topside exhaustion in XAU/USD. A newly identified ascending pitchfork extending off the 2021 & 2022 lows (blue) seems to be defining this advance rather well with initial support eyed at the median-line. Lateral support rests at the objective January high at 1959 backed by the April high-week reversal close at 1926- losses should be limited to this threshold IF price is heading higher on this stretch. Broader bullish invalidation now raised to the May high-week close / 38.2% Fibonacci retracement at 1891-1903.

Initial resistance steady at 2035 with a breach / close above 2075/81 needed to mark resumption of the broader uptrend towards the 75% parallel (currently ~2100) and the 100% extension of the 2022 advance at 2149.

Bottom line: Gold is testing resistance at the record highs on building momentum divergence. The last time we tested these highs price closed 1.93% & 3.8% in 2020 & 2022 respectively- both ultimately fueled declines of more than 19% and while the broader outlook remains constructive, the immediate advance may be vulnerable after this last attempt.

From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to the 2022 channel line IF price is heading higher on this stretch with a weekly close above 2075 needed to mark resumption. Review my latest Gold short-term technical outlook for a closer look at the near-term XAU/USD technical trade levels.

Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

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

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

Contracts for Difference (CFDs) are not available to US residents.

FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of Stonex Group Inc.

Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.

Know your advisor