Gold Short-term Outlook: XAU/USD Trump Rally at Risk Into Resistance

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

• Gold prices eyed record highs as four-week rally extends into uptrends resistance
• XAU/USD advance vulnerable near-term; Trump speech, FOMC, Core PCE on tap
• Resistance 2761, 2787-2804 (key), 2900- Support 2744, 2715 (key), 2695

Gold prices are poised to mark a fourth consecutive weekly advance with XAU/USD rallying nearly 5.3% since the start of the year. The bulls may be vulnerable near-term as gold responds to uptrend resistance with the immediate focus on this pullback. Battle lines drawn on the short-term technical charts heading into the close of the week.

Gold Price Chart – XAU/USD Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; XAU/USD on TradingView

Technical Outlook: In my last Gold Short-term Price Outlook we noted that XAU/USD was, “gold recovery is approaching consolidation resistance just higher with the monthly opening-range taking shape just below. The immediate focus is on a breakout of the 2594-2680 range. From a trading standpoint, loses should be limited to the November trendline IF price is heading higher on this stretch with a close above 2715 needed to mark uptrend resumption.”

Gold rallied through consolidation resistance days later with a topside breach of the October 23^rd reversal close at 2715 on Tuesday fueling this last leg of the advance. The rally exhausted into near-term resistance yesterday and immediate focus is on this pullback in price with the broader technical outlook weighted to the topside while above the median-line.

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 an ascending pitchfork with the upper parallel converging on the 88.6% retracement of the October decline at 2761. A topside breach / close above this resistance hurdle is needed to mark uptrend resumption towards the next major technical consideration at 2787-2804- a region defined by the record high-close and the 2.618% extension of the 2022 range breakout. Look for a larger reaction there IF reached- note that a breakout here would likely fuel another accelerated advance in gold with subsequent resistance eyed near 2900.

Initial support is being tested now at the record high-day close (HDC) at 2744 and is backed closely by 2715 and the 38.2% retracement at 2695. Broader bullish invalidation now raised to the 61.8% retracement of the December rally at 2652.

Bottom line: The gold breakout has extended into uptrend resistance and the immediate advance may be vulnerable here near-term. From a trading standpoint, losses should be limited to 2715 IF price is heading higher on his stretch with a close above 2761 needed to fuel the next leg of the advance.

Keep in mind President Trump is slated to speak later today and market participants will be searching for further clarity on the administrations’ tact on tariffs. Also note that the FOMC interest rate decision and key U.S. inflation data are on tap next week- stay nimble into the releases and watch the weekly closes 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.  

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

Follow Michael on X @MBForex