Gold Price Forecast: XAU/USD Snaps Back as Bears Emerge

Gold Technical Forecast: XAU/USD Weekly Trade Levels

• Gold bulls vulnerable into 2024 open after rallying 18.5% off October lows / record high
• XAU/USD trading just below confluent uptrend resistance- exhaustion risk
• Resistance 2075/81, 2130, 2151 – Support 2004, 1975, 1935/50 (key)

Gold prices are on the defensive into the start of the month after XAU/USD failed to close above key technical resistance near the 2020 swing highs. While the broader outlook remains constructive, the immediate focus is on this reaction off uptrend resistance and we’re on the lookout for possible downside exhaustion in the weeks ahead. These are the updated targets and invalidation levels that matter on the XAU/USD weekly technical chart into the yearly-open.

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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 a constructive outlook while above the yearly moving-average with critical resistance eyed, “at the 2020 swing high / 2023 record high at 2075/81- look for a larger reaction there IF reached.” XAU/USD ripped through this threshold into the December open to register an intraday high at 2146 before reversing sharply lower. Price has been unable to mark a weekly (or daily) close above this threshold despite four-weekly attempts – threat for some exhaustion here.

Initial support rests with the record high-week close (HWC) at 2004 backed by the 50% retracement of the 2023 yearly range at 1975. Key support / bullish invalidation now raised to 1935/50- a region defined by the 61.8% Fibonacci retracement, the November close-low, the 38.2% retracement of the broader 2022 advance, and the 52-week moving average.

A topside breach / close above this key pivot zone (2075/81) is needed to mark uptrend resumption with subsequent resistance objectives eyed at 2130 and the 100% extension of the 2022 rally at 2151 – look for a larger reaction there IF reached.

Bottom line: Gold failed to mark a weekly close above key technical resistance and while the broader outlook remains constructive, the advance may be vulnerable here into the start of the year. From a trading standpoint, we’re on the lookout for a possible exhaustion low in the weeks ahead with a close above 2081 ultimately needed to mark uptrend resumption. Losses should be limited to 1935 on pullbacks IF price is heading higher on this stretch. Note that we get the releases of US non-farm payrolls into the close of the week- stay nimble into the start of the month. I’ll publish an updated Gold Short-term Technical Outlook once we get further clarity on the short-term XAU/USD technical trade levels.

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

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