Gold Technical Outlook: XAU/USD Short-term Trade Levels
- Gold has rebounded sharply from key support with the rally extending more than 6% off the monthly low.
- Recovery has been stalled below resistance for the past five-days with the weekly opening range preserved – breakout to offer guidance.
- Topside breach would signal continuation of the monthly recovery while the a below support would shift focus back toward the recent lows.
- Resistance 4742, 4855-4910 (key), 5025- Support 4605/22, 4492-4533 (key), 4401/07
Gold prices have recovered sharply from recent lows, but the rebound is beginning to lose momentum just below a major resistance zone. XAU/USD remains trapped within a developing range after failing to break through Fibonacci resistance, keeping the focus on a potential breakout for guidance. The next move from this structure could prove decisive in determining whether the recovery extends or a broader pullback resumes. 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 XAU/USD was, “testing pivotal resistance here and the immediate focus is on a reaction off this mark. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- losses should be limited to 4533 IF price is heading for a breakout on this stretch with a close above 4910 needed to fuel the next major leg of the advance.” That day marked the April high with gold falling nearly 8% to register an intraday low at 4501 before rebounding into the May open.
The rally faltered at Fibonacci resistance last week at the 61.8% retracement of the April decline near 4742. The weekly opening range is preserved just below this level, and the focus is on a near-term breakout to offer guidance 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 breaking out of the April downtrend last week with resistance capping the advance for the past five days. Initial support rests with the 61..8% retracement of the most recent advance and the objective monthly open at 4605/22. Losses below this threshold would threaten another test of key support at 4492-4533- a region defined by the yearly low-week close (LWC) and the 2025 high-day close (HDC). Look for a larger reaction there IF reached. Subsequent support rests with the 61.8% retracement of the March rally and the yearly low-day close (LDC) at 4401/07.
A topside breach of the weekly opening-range exposes key resistance at 4855-4910- a region defined by the 100% extension of the March advance, the April high, and the 61.8% retracement of the March decline. A daily close above this level would mark resumption of the March uptrend with subsequent resistance objectives eyed at the 61.8% retracement of the January decline at 5025 and 78.6% retracement of eh March decline at 5133.
Bottom line: A recovery off key support is now testing initial resistance with the weekly opening-range taking shape just below- look for the breakout to offer guidance. From a trading standpoint, losses would need to be limited to 4605 IF price is heading higher on this stretch with a close above 4742 needed to fuel the next leg of the advance. The broader focus is on a breakout of the 4492-4910 zone to determine the medium-term outlook for gold.
Event risk is limited heading into next week and headlines regarding the ongoing war in Iran are likely to dominate sentiment over the next few days. Stay nimble here and watch the weekly close for guidance. 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
