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Gold Technical Forecast: Gold Surges as Bulls Go for Break

Gold Technical Price Forecast:XAU/USD Weekly Trade Levels

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Gold prices are surging back towards the highs but a key technical confluence stands in the way. These are the updated targets and invalidation levels that matter on the XAU/USD weekly price chart. Review my latest Weekly Strategy Webinarfor an in-depth breakdown of thisgold technical setup and more.

Gold Price Chart – XAU/USD Weekly

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

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

Notes: In my last Gold Weekly PriceOutlook we noted that XAU/USD had, “exhausted into key resistance around the record highs – risk for some more consolidation here before the next break higher.” Gold spent the following three-weeks contracting just above key weekly support at the May high-close / 38.2% retracement of the August rally at 1903/20 with a near-term breakout shifting the focus higher.

Key weekly resistance now eyed 1988-2001– a region defined by yearly high-week close / 61.8% Fibonacci retracement of the March sell-off. A breach / weekly close above this threshold is needed to mark resumption of the broader uptrend towards the record high-week close at 2034 and 2073/75. A weekly close below 1903 would be technically damaging for gold with such a scenario threatening a larger correction towards the 2021 high-week close at 1849 and the 61.8% retracement of the August rally at 1828.

Bottom line: A near-term breakout shifts the focus back towards key resistance around 2K – we need close above this threshold to mark resumption. From a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards 1988-2001- any pullbacks should be limited to the 1903 IF price is indeed heading higher. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trade 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 Retail Positioning - GC Technical Forecast

  • A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +2.63 (72.44% of traders are long) – typically bearishreading
  • Long positions are2.91% higher than yesterday and 3.94% higher from last week
  • Short positions are 7.09% higher than yesterday and 11.22% 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.

Previous Weekly Technical Charts

– Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex