Gold Price Forecast: XAU/USD Breaks Out Ahead of Key Inflation Data

Gold Technical Forecast: XAU/USD Weekly Trade Levels

• Gold rally extends more than 12% off yearly lows- now approaching uptrend resistance
• XAU/USD bulls face key US inflation into the close of the month / quarter
• Resistance ~2230s, 2277, 2309 – Support 2180, 2131/46, 2075/81

Gold prices surged more than 2.2% this week with a four-day rally now within striking distance of fresh record highs. While the recent breakout does keep the trade constructive, the advance is now approaching uptrend resistance and we’re on the lookout for a reaction here into the close of the month / quarter with key US inflation data on tap. These are the updated targets and invalidation levels that matter on the XAU/USD weekly technical heading into April.

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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 my last Gold Weekly Price Forecast we noted that XAU/USD had , “broken out of the yearly opening-range / key resistance pivot with the rally now extending into the record highs. From at trading standpoint, a good zone to raise protective stops- look to reduce portions of long exposure on a stretch towards 2180. Losses should be limited to 2075 IF price is heading higher with a close above the 2023 trendline needed to unleash the next major thrust higher.” Gold failed to mark a weekly close above this threshold for the last three-weeks and the focus is on this fourth attempt with core PCE data on tap ahead of monthly close.

Initial weekly resistance is eyed with the 2023 slope parallel (currently ~2230s) – a breach / weekly close above this trendline is needed to keep the immediate advance viable towards subsequent resistance objectives at the 100% extension of the 2022 advance at 2277 and the 100% extension of the October advance at 2309 – both levels of interest for possible topside exhaustion / price inflection IF reached.

Initial weekly support now at 2180 and is backed by 2131/46- a region defined by the 38.2% retracement of the yearly range and the 2023 swing high. Note that the median-line converges on this threshold and further highlights its technical significance over the next few weeks. Broader bullish invalidation now raised to the 61.8% Fibonacci retracement / 2020 high / May high at 2075/81.

Bottom line: The gold breakout is extending towards uptrend resistance at fresh record highs. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to 2131 IF price is heading higher on this stretch with a close above the upper parallel needed to fuel the next leg towards 2277.

Keep in mind the release of the February core personal consumption expenditure (PCE- Fed’s preferred inflationary gauge) is on tap into the close of the week, month, and quarter. Stay nimble here into the April opening-range. Review my latest Gold Short-term Outlook for a closer look at 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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