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Gold Price Technical Outlook: XAU/USD Recovery Faces Trend Resistance

Gold Technical Price Outlook: XAU/USD Near-term Trade Levels

Gold prices rallied more than 3.2% off last week’s low with the advance now approaching near-term downtrend resistance- we’re looking for a reaction just higher for guidance. These are the updated targets and invalidation levels that matter on the XAU/USD technical charts in the days ahead. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this gold trade setup and more.

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Gold Price Chart – XAU/USD Daily

Gold Price Chart - XAU/USD Daily - GLD Trade Outlook - GC Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview

Technical Outlook: In my last Gold Price Outlook we noted that XAU/USD was,approaching uptrend support and we’re looking for a reaction.” Price rebounded off key near-term support last week at the May low / 100% Fibonacci extension of the mid-May decline at 1669/73 (low registered at 1670) with the advance now eyeing confluence resistance at 1731– a level defined by the a objective June open and the yearly high-day close. Ultimately, a breach / close above the yearly high-close at 1747 would be needed to mark resumption of the broader uptrend.

Gold Price Chart – XAU/USD 120min

Gold Price Chart - XAU/USD 120min - GLD Trade Outlook - GC Technical Forecast

Notes: A closer look at Gold price action sees XAU/USD trading within the confines of a descending pitchfork formation with recent recovery now approaching initial resistance at 1726 backed by 1731– both regions of interest for possible topside exhaustion IF reached. Initial support now back at 1700 backed by 1691. A break / close below 1669/73 is needed to suggest a larger correction is underway towards 1645.

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Bottom line: The gold rebound is now approaching near-term downtrend resistance at the objective monthly open. From a trading standpoint, look for reduce long-exposure / raise protective stops on a stretch into the upper parallel – look for a reaction there for guidance. Rallies should be capped by the upper parallel IF price is indeed heading lower. Review my latest Gold Weekly Price Outlook for a closer look at the longer-term XAU/USD technical trading levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Gold Trader Sentiment – XAU/USD Price Chart

Gold Trader Sentiment - XAU/USD Price Chart - GLD Trade Outlook - GC Technical Forecast

  • A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +2.52 (71.56% of traders are long) – bearishreading
  • Long positions are5.59% lower than yesterday and 3.74% higher from last week
  • Short positions are 13.37% higher than yesterday and 7.74% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long
Gold MIXED

Data provided by

of clients are net long. of clients are net short.

Change inLongsShortsOI
Daily0%-6%-1%
Weekly-9%24%-2%

Active Trade Setups

– Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex