Gold Short-term Technical Outlook: XAU/USD Slips into Support

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

• Gold prices turn from uptrend resistance- pullback now testing initial trend support
• XAU/USD risk for possible exhaustion / price inflection ahead- NFPs on tap
• Resistance 2514, 2524 (key), 2550– Support 2469/83, 2447, 2426/31 (key)

Gold prices have fallen more 2.3% from the record highs with the pullback testing technical support this week. The focus is on possible price inflection off this zone early in the month with the weekly / September opening-range taking shape just above. Battle lines drawn on the XAU/USD short-term technical charts heading into NFPs.

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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 XAU/USD was, “testing major resistance at the record highs and we’re looking for possible price inflection up here in the days ahead. From a trading standpoint, losses should be limited to 2426 IF price is heading higher on this stretch with a close above 2483 needed to mark uptrend resumption.” Gold briefly registered an intraday low at 2432 three-days later with a breach above 2483 the following day fueling a rally of more than 4% off the that low.

The rally exhausted into the upper parallel of a newly identified ascending pitchfork on August 20^th with the pullback now testing median-line support. The focus is on highlighted technical confluence around 2469/83- a region defined by the July high-close and the objective July swing high. We’re looking for possible price inflection off this key pivot zone 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 at support into the start of the week / month and we will be looking for the opening-ranges to offer some guidance here. A break / close below this threshold would be needed to suggest a more significant bull market correction is underway with initial support objectives eyed at the August open near 2447. Broader bullish invalidation now raised to 2426/31- a region defined by the May high-day close (HDC) and the objective April high.

Look for initial resistance at the record high-day close (HDC) at 2514 backed closely by the record close high at 2524- a breach / daily close above this threshold is needed to mark uptrend resumption towards the 100% extension of the June rally at 2550 and the 1.618% Fibonacci extension of the broader 2022 advance at 2565.

Bottom line: Gold turned from uptrend resistance with the pullback off record highs now testing initial trend support. From a trading standpoint, the focus is on a reaction off this mark- losses should be limited to 2469 IF price is heading higher on this stretch with a breach above 2524 needed to mark uptrend resumption.

Keep in mind the weekly & monthly opening-range is taking shape just above support with US Non-Farm Payrolls (NFP) on tap Friday. Stay nimble into the release and watch the weekly close here for guidance. Review my latest Gold Weekly Technical Forecast for a closer look at the longer-term look at the XAU/USD trade levels.  

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

Follow Michael on X @MBForex