Gold Price Forecast: XAU/USD Bears Still in Control

Gold Technical Forecast: XAU/USD Weekly Trade Levels

Gold poised for seventh-daily decline- marks largest weekly loss since June 2021
XAU/USD sell-off approaching confluent support into 2023 lows
Resistance 1848, 1871, 1891– Support 1823, 1793-1807, 1760s

Gold losses continue to mount with XAU/USD plummeting into yearly-open support today, paring the entire 2023 advance. While the immediate threat remains lower, the decline is now approaching a major technical confluence at the yearly opening-range lows- risk for possible downside exhaustion / price inflection here. These are the updated targets and invalidation levels that matter on the XAU/USD weekly technical chart into the start of Q3.

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Gold Price Chart – XAU/USD Weekly

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

Technical Outlook: In last month’s Gold Weekly Price Forecast we noted that, “we head into September looking to confirm an exhaustion low in price – the immediate focus is on a breakout of the monthly opening-range for guidance here. Note that the threat remains for a test of parallel support near 1870 while below 1960.” XAU/USD crashed through parallel support last week with gold plunging more than 7% off the September high.

The decline takes price into yearly-open support at 1823 with weekly RSI now trading at the lowest levels since October of last year. A more significant support zone rests just lower at 1793-1807- a region defined by the 61.8% Fibonacci retracement of the 2022 advance, the 100% extension of the May decline (two-equal legs), the August 22’ high and the February lows. Looking for a larger reaction / price inflection there IF reached. Losses below this threshold would expose a test of pitchfork support, currently near ~1760s.

Monthly-open resistance is eyed at 1848 and is backed closely by 1871. Medium-term bearish invalidation now lowered to the May 2021 high-week close at 1891- a breach / close above this threshold would be needed to mark resumption of the broader uptrend.

Bottom line: The gold sell-off is approaching confluent support into the yearly lows- looking for a reaction down here. From a trading standpoint, look to reduce short-exposure / lower protective stops on a stretch towards 1800- ultimately a close back above 1871 would be needed to alleviate immediate downside pressure.

Keep in mind we are in the beginning throws of the monthly / quarterly opening-ranges with US non-farm payrolls on tap Friday- stay nimble here and watch the weekly close. I’ll publish an updated Gold Short-term Technical Outlook once we get further clarity on the near-term XAU/USD technical trade levels.

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

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