Gold Price Technical Forecast: XAU/USD Bulls Bid the Break

Gold Technical Forecast: XAU/USD Weekly Trade Levels

• Gold surges 3.74% off multi-month lows- constructive while above November trendline
• XAU/USD three-week rally now approaching initial resistance hurdles
• Gold resistance 1965, 1988, 2009/17 – support 1922, 1891-1903 (key), ~1841

Gold prices are poised for a third weekly advance with XAU/USD building on a rebound off confluent trend support. The focus is on a possible reaction just higher as price approaches uptrend resistance and with the medium-term outlook constructive while above yearly trend support. These are the updated targets and invalidation levels that matter on the XAU/USD weekly technical chart.

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Gold Price Chart – XAU/USD Weekly

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

Technical Outlook: In last month’s Gold Weekly Price Forecast we noted that XAU/USD breakdown vulnerable to further losses with XAU/USD within striking distance of critical support at, “1891-1903- a region defined by the May 2021 high week close and the 38.2% Fibonacci retracement of the entire September rally- look for a larger reaction there IF reached.” Price registered an intraweek low at 1892 before rebounding with gold rallying nearly 3.75% off the lows. Has a more significant low now been registered?

Initial resistance is being tested today at the 38.2% retracement of the May decline at 1965 backed closely by the 2022 high-week close at 1988. Ultimately a breach / weekly close above the 61.8% retracement / record high-week close at 2009/17 would be needed to signal resumption of the broader uptrend towards the record high close at 2035 and the record stretch highs at 2075/81.

Initial weekly support now rests with the June low-week close at 1922 backed again by 1891-1903- we’ll continue to reserve this threshold as bullish invalidation level. Note that a close below would threaten a more meaningful correction with such a scenario exposing the 52-week moving average near ~1842 and the objective yearly open at 1823.

Bottom line: Gold has responded to confluent support around 1900 and keeps the outlook weighted to the topside while above the November tradeline (red). From at trading standpoint, losses should be limited to 1922 IF price is heading higher on this stretch with a close above 2016 needed to suggest a more significant low is in pace. Review my latest Gold Short-term Technical 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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