Gold Technical Forecast: XAU/USD Weekly Trade Levels
- Gold breakout marks fourth-consecutive weekly advance- rally stalls into resistance
- XAU/USD bulls face key test with FOMC decision on tap next week
- Resistance 3666, ~3730s, 3782 (key)– Support 3500, 3432 (key), 3240
Gold prices have advanced for four straight weeks, with XAU/USD stalling into resistance at fresh record highs. The focus now shifts to the FOMC interest rate decision next week and while the broader outlook remains constructive, the immediate advance may be vulnerable in the near-term. Battle lines drawn on the XAU/USD weekly technical chart into the Fed.
Gold Price Chart – XAU/USD Weekly
Chart Prepared by Michael Boutros, Sr. Technical Strategist; XAU/USD on TradingView
Technical Outlook: In last month’s Gold Technical Forecast we noted that XAU/USD was, “attempting to breakout of a multi-month consolidation pattern, just below resistance. From a trading standpoint, losses would need to be limited to the February trendline IF price is heading higher on this stretch with a close above 3432 needed to fuel a test of the record high.” Gold broke higher that week with the rally extending nearly 11% off the August low. A four-week rally was halted at technical resistance this week and the immediate advance may be vulnerable heading into FOMC rate decision- risk for infection off this mark.
Initial resistance is eyed at the 300% extension of the 2011 decline at 3666, backed by the upper parallel (currently near ~3730s), and the 1.618% extension of the May advance at 3782- both areas of interest for possible topside exhaustion / price inflection IF reached.
Initial support now rests with the April high at 3500 and is backed by the June high-close / Amy high at 3432- note that the February trendline converges on this threshold over the next few weeks and further highlights the technical significance of this breakout level (area of interest for downside exhaustion IF reached). Broader bullish invalidation now raised to the 38.2% retracement of the yearly range at 3240.
Bottom line: The gold breakout has extended into initial resistance, and the four-week rally may be vulnerable heading into the Fed next week. From at trading standpoint, any losses should be limited to 3432 IF price is heading higher on this stretch with a close above 3666 needed to fuel the next major leg of the advance.
Keep in mind we get the release of the Federal Reserved updated Summary of Economic Projections on Wednesday as they pertain to growth, inflation and the employment. Expect some volatility here- stay nimble into the release and watch the weekly closes here for guidance. Review my latest Gold Short-term Outlook for a closer look at the near-term XAU/USD technical trade levels.
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--- Written by Michael Boutros, Sr Technical Strategist
Follow Michael on X @MBForex
