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Gold Short-term Outlook: Gold Bears Claw Back 2K- XAU Hunts Support

Article By: ,  Sr. Technical Strategist
November 10, 2023 11:28 AM

Gold Technical Outlook: XAU/USD Short-term Trade Levels

  • Gold prices plunge into November- reversal off resistance threatens deeper correction
  • XAU/USD sell-off approaching initial support pivot- risk for inflection
  • Resistance 1969, 1983/87 (key), 2004/06 – Support 1933/40, 1909, 1877/86 (key)

Gold prices plunged more than 3.4% off the October highs with XAU/USD poised for the third-largest weekly decline of the year. A reversal off technical resistance early in the month puts the bulls back on the defensive and we’re on the lookout for a possible exhaustion low in the days ahead. These are the updated targets and invalidation levels that matter on the XAU/USD short-term technical charts.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this gold technical setup and more. Join live on Monday’s at 8:30am EST.

Gold Price Chart – XAU/USD Daily

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

Technical Outlook: In last month’s Gold Short-term Price Outlook we noted that a breach above confluent resistance in XAU/USD, “suggests that a more significant low was registered this month and shifts the medium-term outlook back to the long-side while above the October-open at 1848.” Our ‘bottom line’ stated that, “the focus is on possible inflection off the 200DMA- losses should be limited to 1903 IF price is heading higher on this stretch with a close above 1945 needed to fuel the next leg higher.”

Gold prices ripped higher the following day with the rally extending nearly 11% off the October lows. The advance faltered at resistance into the November open and the technical assumption is that this pullback from $2k is corrective in nature. That said, we’re on the lookout for an exhaustion low in the days ahead.  

Gold Price Chart – XAU/USD 240min

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

Notes: A closer look at gold price action shows XAU/USD trading within the confines of a descending pitchfork extending off the late-November highs with price approaching confluent support today at 1933/40- a region defined by the 38.2%  retracement of the October rally, the 200-day moving average, and the 1.618% Fibonacci extension of the recent decline. Looking for possible inflection here.

A break / close below threatens a deeper plunge towards 1909 with key support at the November 2021 swing high / 61.8% retracement at 1877/86- losses should be limited to this threshold for the October breakout to remain viable (broader bullish invalidation).

Initial resistance is eyed at the upper parallel / July high-day close at 1969 backed by the objective monthly open / July high at 1983/87- A breach / close above this threshold is needed to invalidate the monthly downtrend with a weekly close above 2004/06 (April 14th reversal-close / November high-day close) needed to mark uptrend resumption.

Bottom line: Gold prices have reversed lower near-term, and the threat remains for further losses in the days ahead. That said, we’re approaching a near-term inflection zone here– look for a reaction into 1933 with a close below needed to keep the immediate short-bias in play. From a trading standpoint, we’re on the lookout for an exhaustion low ahead of 1877 IF price is indeed heading higher here with a close above 2006 ultimately needed to put the bulls back in control. Review my latest Gold Weekly Technical Forecast for a longer-term look at the XAU/USD trade levels.  

 

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

Follow Michael on Twitter @MBForex

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