Gold Price Forecast: XAU/USD Tightens Below Key Resistance

Gold Technical Forecast: XAU/USD Weekly Trade Levels

• Gold prices coiled just above uptrend support- June range breakout pending
• XAU/USD vulnerable to larger correction while below monthly high- U.S. CPI on tap tomorrow
• Resistance 3419 (key), 3500, 3600– Support 3229, 3121, 3000/31(key)

Gold is attempting to mark a second weekly advance after nearly posting a monthly doji in May with XAU/USD to coiling just above trend support. The focus is on a breakout in the days ahead with the bulls still vulnerable while below the monthly high. Battle lines drawn on the XAU/USD weekly technical chart.

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, “vulnerable to a test of uptrend support before resumption and the immediate focus is on possible price inflection off 3333. From a trading standpoint, losses would need to be limited to 3202 IF price is heading higher on this stretch…” Gold plunged more than 10.8% off the record highs the following week with XAU/USD registering a close low at 3203! The subsequent recovery now puts the focus on a potential breakout as price coils just above uptrend support.

Weekly resistance is now eyed at the 75% parallel / 78.6% retracement of he April decline at 3419- a breach / weekly close above this threshold is needed to mark resumption of the broader uptrend. Subsequent resistance objectives are eyed at the record swing high at 3500 and the upper parallel, currently near 3600.

Weekly support rests with the 6.18% retracement of the May advance at 3229- note that the median-line converges on this threshold over the next few weeks and a break / close below would threaten a larger correction within the multi-year uptrend. Subsequent support rests at the May low near 3121 with broader bullish invalidation steady at 3000/31- both zones of interest for possible downside exhaustion / price inflection IF reached.

Bottom line: Gold is coiled just above the median-line of a multi-year uptrend. From a trading standpoint, the immediate focus is on a breakout of the 3229-3419 for guidance with the bulls still vulnerable while below the 75% parallel. Ultimately a larger correction may offer more favorable opportunities with a close above 3500 needed to fuel the next leg of the advance.

Keep in mind we get the release of key U.S. inflation data tomorrow with the Consumer Price Index (CPI) on tap. 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.

Key US / Gold Economic Data Releases

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

Follow Michael on X @MBForex