Gold Short-term Outlook: XAU/USD Poised for June Breakout

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

• Gold prices rally exhausts into technical resistance- XAU/USD nearly unchanged in May
• XAU/USD bulls eye key support at yearly uptrend- BoC / ECB rate decisions, NFPs on tap
• Resistance 3355/81 (key), 3431, 3500- Support 3272/88, 3210/14, 3132/37

Gold prices are poised to close the week down more than 2% with XAU/USD pulling back from technical resistance. While the risk remains for further losses near-term, the focus into the start of the month is on a possible test of support before resumption of the broader uptrend. Battle lines drawn on the short-term gold technical charts.

Gold Price Chart – XAU/USD Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; XAU/USD on TradingView

Technical Outlook: In my last Gold Short-term Outlook we noted that XAU/USD had, “responded to key technical support and the first major test of the November uptrend. Risk for exhaustion / price inflection off this mark in the days ahead. From a trading standpoint, the immediate focus is on a breakout of the 3132-3288 range for guidance with the bears vulnerable while above this key support pivot.” Gold broke higher the following week with a rally of more than 7.8% off the monthly low exhausting into confluent resistance this week at 3355/81- a region defined by the 61.8% retracement of the April decline and the record high-day close (HDC). The focus is on this pullback from resistance and the bulls will need to establish a low ahead of pitchfork support (blue) for the broader yearly advance to remain viable.

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 just above near-term support into the close of the week near the 38.2% retracement of the recent rally / monthly open at 3272/88 with key support at 3210/14- a region defined by the 100% extension of the weekly decline and the 61.8% retracement. Note that the lower parallel converges on this threshold early in the month and a break / close below would be needed to suggest a more significant trend reversal is underway. Subsequent support seen at the 3132/37 and 3018.

A topside breach / close above 3381 would threaten resumption of the broader uptrend towards the record high-close at 2431 and the record high at 3500- look for a larger reaction there IF reached. Subsequent technical objectives eyed at 3600 and the 3666.

Bottom line: 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.

Keep in mind we are heading into a new month with the Bank of Canada (BoC) & European Central Bank (ECB) interest rate decisions and U.S. Non-Farm Payrolls on tap next week. Stay nimble into the June opening-range and watch the weekly closes here 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, Sr Technical Strategist with FOREX.com

Follow Michael on X @MBForex