Gold Short-term Outlook: XAU/USD Plunges on Trump Victory- Fed on Tap

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

Gold prices plunge nearly 5% as Trump secures second term
XAU/USD threatens August uptrend- testing support ahead of Fed rate decision
Resistance 2672/85, 2736/44 (key), 2787-2804- Support 2634/44, 2594-2602 (key), 2532/33

Gold prices have fallen nearly 2.8% since the start of the week with the election sell-off intensifying today in New York. The decline takes XAU/USD below a key pivot zone and the focus is on today’s close as the bears threaten a deeper correction within the broader uptrend. Battle lines drawn on the XAU/USD short-term technical charts ahead of tomorrow’s FOMC interest rate decision.

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 had, “Gold has set the October opening-range just below resistance at the record high-day close. The immediate focus is on a breakout of the weekly opening-range for guidance here with the immediate advance vulnerable sub-2672.” Gold ripped higher two-day later with the rally extending 8.5% off the October lows to register fresh record highs.

The advance exhausted into confluent uptrend resistance into the close of the month with gold turning sharply lower last-night as Donal Trump secured the US presidential election. The decline is now attempting to break confluent support at the September high-day close (HDC) / September high around 2672/85- note that the August channel (red) and the 75% parallel (blue) converge on his region and the immediate focus is on today’s close with respect to this zone. All eyes now fall on the Fed.

Gold Price Chart – XAU/USD 240min

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 extending off the October high. The 25% parallel caught today’s decline with price now testing 2672/85 as resistance- watch today’s close.

Initial support now eyed at the October open / 1.618% extension of the recent decline at 2634/44 with a more significant confluence zone seen just lower at 2594-2602- a region defined by the 38.2% retracement of the May advance & the October swing low and an area of interest for possible downside exhaustion / price inflection IF reached.

A breach above the median-line would threaten a test of the upper parallel with near-term bearish invalidation now set tot the objective weekly open / record HDC / November open at 2736/44. A close above this threshold would be needed suggest a more significant low is in place / mark uptrend resumption towards subsequent resistance objectives at the record high-close (2787) and the 2.618% extension of the 2022 range at 2804- look for a larger reaction there IF reached.

Bottom line: A reversal off technical resistance is now testing initial support hurdles at the August uptrend. Look for a breakout of the November opening-range in the days ahead with the medium-term threat for a larger correction with the broader uptrend. From a trading standpoint, rallies would need to be limited to the monthly open IF price is heading lower on this stretch with a close below 2672 needed to keep the immediate short-bias viable. Look of larger reaction on a stretch towards 2600 IF reached.

Keep in mind we get the release of the Federal Reserve interest rate decision tomorrow with the central bank widely anticipated to cut another 25 basis points. Stay nimble into the release and watch the weekly close here for guidance. Review my latest Gold Weekly Technical Forecast for a closer look at the 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 X @MBForex

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.