Gold Price Forecast: XAU/USD Breakout Flies to Fresh Record Highs

Gold Technical Forecast: XAU/USD Weekly Trade Levels

• Gold price breach major resistance- breakout extends to fresh record highs
• XAU/USD momentum remains constructive- key resistance in view ahead of Fed
• Resistance 2643/71 (key), 2743, 2804 – Support 2517/24, 2450 (key), 2333

Gold prices surged more than 3.3% this week with a technical breakout taking XAU/USD to fresh record highs on Friday. The rally keeps the outlook weighted to the topside heading into major event risk next week with the Federal Reserve interest rate decision on tap. Battle lines drawn on the XAU/USD weekly technical chart.

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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 Weekly Price Forecast we noted that XAU/USD had, “extended into lateral resistance near the multi-year uptrend with weekly momentum (RSI) attempting to break back below 70 – risk for possible near-term exhaustion. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to 2414 IF price is heading higher on this stretch with a close above 2565 needed to fuel the next major leg.”

The resistance zone in focus broke this week at 2517/24- a region defined by the 1.618% Fibonacci extension of the October advance and the measured inverse head-and-shoulders objective of the 2022 advance. This region held for more than three-weeks before breaking with the advance now extending to fresh record highs as weekly momentum asserts itself north of 70. The bulls are in control for now.

The next major resistance zone is eyed at 2643/71-a region defined by the 100% extension of the broader 2015 advance and the 1.618% extension of the most recent June rally. Note that numerous upslopes converge on this threshold and further highlight its technical significance- look for a larger reaction there IF reached. Subsequent resistance objectives at the 200% extension of the late 2022 advance at 2743 and the 2.618% at 2804.

Initial weekly support now rests back at 2517/24 with the June upslope seen just lower near the May high at 2450. Broader bullish invalidation now raised to the May high-week reversal close at 2333- losses below this threshold would suggest a more significant high is in place and would invalidate the October rally.

Bottom line: Gold prices have broken above a major technical hurdle with weekly momentum still deep in overbought territory. From a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a rally toward the upper parallels (2643/71)- losses should be limited to 2450 IF price is heading higher on this stretch.

Keep in the FOMC interest rate decision is on tap Wednesday with market participants now pricing a 50/50 likelihood of a 25/50 basis point cut. As always, the updated interest rate dot plot and summary of economic projections will be center stage as traders attempt to gauge the future path for rates. The Fed has the potential to fuel some serious volatility in gold- stay nimble into the release watch the weekly closes here. I’ll publish an updated Gold Short-term 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

Follow Michael on X @MBForex