Gold Short-term Outlook: XAU/USD Breaks Out- Bulls Eye Record High

Gold Technical Outlook: XAU/USD Short-term Trade Levels

• June opening-range breaks out as Israel launches pre-emptive strikes on Iran
• Gold prices surge more 10.4% off May low- rally extends into uptrend resistance
• XAU/USD risk for near-term exhaustion / price inflection- BoJ, FOMC & BoE rate decisions on tap
• Resistance 3431 / slope (key), 3500, 3577- Support 3355/80 (key), 3288/89, 3240/45

Gold prices are poised to mark a third consecutive daily advance with XAU/USD clearing the June opening-range on news of war breaking out in the Middle East. The breakout takes price into uptrend resistance and while the broader outlook remains constructive, the immediate advance may be vulnerable while below this slope. Battle lines drawn on the short-term gold technical charts heading into a slew of central bank interest rate decisions next week.

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 rebound off uptrend support failed into the median-line and the focus is on this near-term pullback. From a trading standpoint, losses should be limited to the lower parallel IF price is heading higher on this stretch with a close above 3381 needed to fuel the next leg of the advance.” The lows in XAU/USD held into the June open with gold breaching the monthly opening-range today on news of the Israeli air strikes on Iran. A rally of more than 1.7% extended into uptrend resistance at the median-line before pulling back and the immediate focus is on today’s close with respect to the record high-close at 3431. Risk for near-term inflection off this zone.

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 into the median-line today in early U.S. trade. The immediate advance may be vulnerable while below this slope and a close above is needed to mark resumption of the broader uptrend. Subsequent resistance objectives are eyed at the record high at 3500 and the 100% extension of the May rally at 3578- look for a larger reaction there IF reached.

Initial support now rests back at the 61.8% retracement of the April decline / the record high-day close (HDC) at 3355/80- losses should be limited to the median-line IF price is heading higher on this stretch. Subsequent support seen at the May / June open at 3288/89 with bullish invalidation now raised to the May LDC / late-May swing low at 3240/45- a close below this threshold would be needed to suggest a more significant high is in place / a larger reversal is underway.

Bottom line: The gold rally has extended into uptrend resistance at the median-line- risk for possible inflection / topside exhaustion into this slope. From a trading standpoint, losses should be limited to 3355 IF price is heading for a breakout with a close above the median-line needed to fuel the next major leg of the advance. 

Keep in mind we get the release of key interest rate decisions from the Bank of Japan, the Federal Reserve, and the Bank of England next week. The ongoing conflict in Iran adds an additional layer of event risk as gold presses record highs- stay nimble next week 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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Economic Calendar - latest economic developments and upcoming event risk.

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

Follow Michael on X @MBForex