Gold Price Technical Outlook: XAU/USD Rejected At Resistance

Gold prices reversed off trend resistance this week with the move risking further losses for the precious metal near-term. These are the updated targets and invalidation levels that matter on the XAU/USD charts.

GOLD DAILY PRICE CHART (XAU/USD)

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Gold Price Chart - XAU/USD Daily

Technical Outlook: In my latest Gold Weekly Technical Outlook we noted that “The focus is higher while above 1302 with price now approaching subsequent resistance objectives. From a trading standpoint, looking to reduce long-exposure just higher and be on the lookout for near-term exhaustion on a stretch towards 1350.” Gold registered a high at 1346 this week before pulling back with price reversing off channel resistance on building momentum divergence.

The threat remains for a larger pullback while below 1348/50. Daily support rests with the monthly open / 61.8% retracement at 1319/21 with broader bullish in validation steady at 1302. A topside breach of the formation targets the 2016 high close at 1366 backed by the 38.2% retracement at 1379.

GOLD 120MIN PRICE CHART (XAU/USD)

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Gold Price Chart - XAU/USD 120min

Notes: A closer look at price action shows gold trading breaking below a near-term ascending channel after rebounding off longer-term slope resistance. The move leaves the prices vulnerable sub-1341 with a break below near-term support here at 1330 exposing 1319/20 backed by 1311 – both levels of interest for exhaustion / long-entries if reached. Ultimately a breach above 1350 is needed to mark resumption of the broader uptrend we’ve been tracking since last year.

Bottom line: The immediate threat is lower in price with the decline to ultimately offer more favorable long-entries. From a trading standpoint, look for a reaction on a move towards confluence support around ~1320s or even 1311 for downside exhaustion with a breach/ close above 1350 needed to fuel the next leg higher in price.

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