Gold Weekly Outlook

Gold consolidation continues. The metal rallied all the way up to the 2721 resistance and even set a fresh monthly high. But that’s when the rally stopped, and bears jumped back in.

Gold prices (XAU/USD) have been range-bound recently, following a pullback from record highs in late October. This decline ended a nine-month winning streak, with November closing in the red. Some investors anticipate a more significant correction before re-entering the market, leading to a cautious short-term gold outlook.

The price of gold trades back above the 50-Day SMA ($2664) as it stages a five-day rally for the first time since March.

Gold has now put in two consecutive red bars on the weekly and that’s been rare as there’s only been two other occurrences of such in the past seven months. But it’s still too early to say that the metal has topped.

Gold has started a busy week on the front-foot, after finishing last week on a downbeat note. The recovery is due in part to a weaker US dollar as investors have evidently scaled back some Trump trades – which also explains the gap seen in the EUR/USD pair we saw overnight .

The yellow metal ended Friday near its session lows, creating some bearish-looking price candles on both the daily and weekly time frames. So the near-term gold forecast is somewhat bearish ahead of the much-anticipated US presidential election and the FOMC’s policy meeting in the week head.

The price of gold may consolidate over the remainder of the month as the Relative Strength Index (RSI) falls back from overbought territory.

It was last month’s ECB rate cut announcement that triggered a bullish breakout in gold beyond the 2530 level, and bulls didn’t really look back at all until the 2600 test at the FOMC rate cut announcement.