Gold Price Forecast: XAU/USD Bulls Face Off at 2500

Gold Technical Forecast: XAU/USD Weekly Trade Levels

• Gold price breakout of August opening-range now testing confluent uptrend resistance
• XAU/USD daily / weekly momentum waning – threat for exhaustion into monthly cross
• Resistance 2517, 2565 (key), 2643 – Support 2415, 2322/33, 2278 (key)

Gold prices are poised to snap a two-week rally with XAU/USD trading just below record highs. A breakout of the August opening-range is now testing uptrend resistance into the close of the month and while the broader outlook remains constructive, the immediate advance may be vulnerable here as gold attempts to mark an outside-day reversal off the weekly high. Battle lines drawn on the XAU/USD weekly technical chart into the monthly cross.

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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, “From a trading standpoint, the immediate focus is on a breakout of the objective August opening-range (2366-2470) for guidance here with the medium-term threat still for a corrective pullback off while below uptrend resistance.” The range broke on August 16^th with gold rallying more than 7% off the monthly low to register fresh intraday record high at 2531.

The advance exhausted into confluent resistance last week at the 1.618% Fibonacci extension of the October 2023 advance near 2517. Note that a parallel of the 2018 trendline extending off the 2020 highs (red) also converges on this threshold and further highlights the technical significance of this zone.

Initial weekly support rests with the May high-close at 2414 and is backed by the 38.2% retracement of the yearly range / May high-week close (HWC) at 2322/33. Broader bullish invalidation rests with the 23.6% retracement of the broader 2022 advance at 2278.

We have made a minor adjusted to the slope of our pitchfork (blue) to better align with price and a topside breach from here keeps the focus on pitchfork resistance / the 1.618% extension of the 2022 advance at 2565 – look for a larger reaction there IF reached. Subsequent objectives eyed at the 100% extension of the broader 2015 rally at 2643 in the event of a breakout.

Bottom line: Gold prices have 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.

Keep in mind we are heading into the close of the month with key US inflation data (PCE) on tap ahead of an extended holiday weekend. Watch the weekly close here and stay nimble into the September open. 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