Gold Short-term Outlook: XAU/USD Bulls Feel the Heat- Support In View

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

Gold prices plunge more than 2% off July high- breakout faces first major test
XAU/USD risk for downside exhaustion / price inflection into key support levels
Resistance 1959, 1965, 1982– support 1937, 1924/29, 1903/10 (critical)

Gold prices are threatening to snap a four-week winning streak with the XAU/USD breakout now eyeing the first major test. The battle-lines are drawn heading into August and we’re on the lookout for a possible exhaustion low in the weeks 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 XAU/USD was, “testing confluent technical support into the monthly opening-range with major event-risk on tap tomorrow- risk for significant price inflection here.” The support zone in focus was, “at 1903/10- a region defined by the 38.2% retracement of the 2022 advance and the 61.8% Fibonacci retracement of the objective yearly range. Note that this threshold converges on the November channel line and further highlights its technical significance.”

Gold registered an intraday low at 1902 that day before rebounding sharply with a breakout of the July opening-range / a multi-month downtrend days later, fueling a rally of nearly 5% off the June lows. Price has pulled back more than 2.2% off those highs with the decline taking gold into a cluster of key support zones – we’re looking for possible downside exhaustion into one of these levels.

Gold Price Chart – XAU/USD 120min

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 proposed descending pitchfork formation extending off the July highs. A break below the median-line here exposes the 1937 pivot zone backed by the 1.618% projection of the July decline and the 61.8% Fibonacci retracement of the late-June rally at 1924/29- both levels of interest for possible downside exhaustion IF reached. Ultimately a break / close below 1903/10 would once again be needed to suggest a larger trend reversal is underway.

Weekly open resistance is eyed at 1959 backed by the objective August open at 1965- a breach / close above this threshold would mark resumption of the broader uptrend towards subsequent objectives at 1982 and key resistance at 2004/09- look for a larger reaction there IF reached.

Bottom line: Gold prices are approaching key support zones which will need to hold for the July breakout to remain viable. From a trading standpoint, we’re on the lookout for an exhaustion low heading into August - losses should be limited to 1924 IF price is heading higher with a close above the monthly open needed to mark resumption. Review my latest Gold Weekly Technical Forecast for a longer-term look at the XAU/USD trade levels.

Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Short-term Technical Charts

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

Follow Michael on Twitter @MBForex

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.