Gold Technical Outlook: XAU/USD Short-term Trade Levels
- Gold is on pace for a second consecutive weekly advance, with XAU/USD trading just below resistance at the record highs into the weekly close.
- XAU/USD is coiled beneath this pivot, raising the risk for a near-term inflection. Outlook remains constructive while above the monthly low
- Resistance 4356/82 (key), 4500, 4578- Support 4252, 4218, 4164/72 (key)
Gold prices have rallied more than 3.2% since the start of the December with XAU/USD trading just below pivotal resistance into the close of a second weekly advance. The monthly range breakout remains intact but coiled just below this key barrier, leaving price vulnerable to a near-term inflection as momentum stretches. A decisive reaction here will be critical in determining whether gold can break into fresh record territory or if a pause is needed to reset conditions before the next push higher. Battle lines drawn on the XAU/USD short-term technical charts.
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 Outlook we noted that a XAU/USD had, “confluent resistance at a pivotal slope, and the immediate focus is on possible inflection into the high-day close of the month. From a trading standpoint, losses should be limited to the weekly open IF price is heading higher on this stretch with a close above 4252 ultimately needed to fuel the next major leg of the advance.” Gold broke higher two-days later with XAU/USD registering an intraday high at 4264 before exhausting into the December open. The monthly opening-range broke in the wake of the Fed decision with the rally now testing record high resistance into the close of the year. Keep in mind daily momentum remains in overbought territory and keeps the bulls in control for now- risk for possible inflection here.
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 extending off the October low. The weekly opening-range is preserved just below a major pivot zone at 4356/82- a region defined by the 100% extension of the October advance, the record-day close (HDC) and the record swing high. Note that the 75% parallel converges on this threshold over the next few days and a breach / daily close above would threaten resumption of the late-October uptrend. Subsequent resistance objectives are eyed at the 4500 and the 1.618% extension at 4578.
Initial support rests with the October reversal close at 4252- note that the 25% parallel converges on this level over the next week. Monthly-open support rests at 4218 with medium-term bullish invalidation now raised to the monthly opening-range lows and the November HDC at 4164/71. A break / close below this threshold would be needed to suggest a more significant high is in place and a larger trend reversal is underway.
Bottom line: The monthly breakout is coiled just below resistance at the record high- look for inflection off this zone in the days ahead. From a trading standpoint, losses should be limited 4252 IF price is heading higher on this stretch with a close above 4382 needed to fuel the next leg of the advance.
Keep in mind the economic calendar is light heading into the shortened holiday week with updated UK & US GDP data and Tokyo inflation data (CPI) highlighting the docket. Stay nimble into the yearly cross and watch the weekly closes for guidance here. Review my latest Gold Weekly Technical Forecast for a closer look at the longer-term XAU/USD trade levels.
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--- Written by Michael Boutros, Senior Technical Strategist
Follow Michael on X @MBForex
