Gold Price Forecast: XAU/USD Snaps Back Before $3k Test

Gold Talking Points:

Gold prices had showed considerable strength since setting a higher-low at the FOMC rate decision in December, and for the eight weeks leading into last week, buyers continued to push.
As I had discussed on Monday before the reversal had begun, the $3k level is a major spot and that’s the type of price that could hinder bullish trends. The next four days were aggressively bearish for gold as the metal dropped all the way down for a test of the 2830-2834 support zone.
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Well, the streak is now over for gold. The metal had gained for each week in 2025 until last week’s sell-off, and bears didn’t hold back as it was an aggressive move that priced-in from Tuesday through Friday.

In the Monday article, I had highlighted how the $3k level in spot Gold could be a hindrance for bulls. A similar scenario showed at the $2k handle, with the 2011 high in spot gold printing $80 below a test of that major psychological level. That ended up holding as the high for almost nine full years, until the Covid backdrop in 2020 finally allowed for a test above $2k. But – even then – buyers were unable to leave the level behind, and that held as resistance for the next three-and-a-half years.

As we came into last year, that price was finally starting to gain acceptance from the broader market as it began to show as support. There were just two daily closes for spot gold below the $2k handle, which then catapulted into a 40% rally into the October high.

Gold Monthly Chart: The $2k Struggle into $3k Resistance

Chart prepared by James Stanley; data derived from Tradingview

Gold Bull Pennant into Fresh Highs

The October high was just $10 inside of $2,800, which can be considered as a psychological level, in its own right. But for the past three weeks it was another rounded number that had held bulls back, and that was the $2,950 level. Bulls shied away from a test there two weeks ago and then finally tested above a week later. And then last week, Monday started with another test above $2,950 before bulls ultimately pulled away which allowed for that larger pullback to play out.

This can lead to the very operable question as to whether the bullish trend is over, and the answer that will need a bit more information. Much like we saw with the November sell-off, there’s remaining potential for support to play out at an area of prior resistance, and given the prior stalling at $2,790, there’s a nearby zone of interest for such with that price spanned up to the $2,800 level.

Gold Weekly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

Gold Shorter-Term

At this point, buyers have softened the weekly low as prices have pulled back above the 23.6% Fibonacci retracement of the November-February bullish move. There’s more support reference from that setup, with the 38.2% retracement plotting within the $2,790-$2,800 zone.

At this point, given the lower-low that printed on the daily after a failure from bulls to sustain the break above $2,950, there’s remaining pullback potential for gold. Lower-high resistance can be sought at the prior support of $2,888 up to the $2,900 psychological level. A hold there keeps the door open for a test of a lower-low. Alternatively, if bulls are able to force a break above that level, highlighted in red below, particularly in early-week trade, the look could shift to shorter-term higher-low support at that same zone to look for a move into and re-test of the $2,950 resistance area.

Gold Daily Chart

Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Strategist

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