Gold rebounded from technical support this week with the rally now testing a critical inflection zone in price. These are the updated targets and invalidation levels that matter on the XAU/USD charts. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.
GOLD DAILY PRICE CHART (XAU/USD)
Technical Outlook: In our latest Gold Weekly Technical Outlook we stated that “Put simply, IF gold prices are going to rebound, next week would be the time- and the support zone we’re trading into would be the place.” The sell-off got a little deeper than expected with price registering a low at 1196 before rebounding with the recovery now testing key near-term, resistance at 1214/16 – a region defined by the November open, the May 2017 low and the 100-day moving average. Note that this pivot zone has fueled numerous price inflections over the past few months and a breach/close above would be needed to suggest a more significant low is in place.
A slight adjustment to our channel keeps the focus on 1201 for support (also the monthly low-day close) – a break below this level risks substantial losses for the yellow metal with such a scenario targeting subsequent support objectives at 1192 and 1180.
GOLD 240MIN PRICE CHART (XAU/USD)
Notes: A closer look at price action shows gold rebounding off the lower bounds of the ascending pitchfork formation we’ve been tracking for the past few weeks. A near-term descending slope off the highs caught the lows this week an ultimately a topside breach is needed to shift the broader focus higher again.
Initial resistance stands at 1214/16 backed by 1220 and the 61.8% retracement at 1225. A breach above the median-line of the broader structure (currently ~1230) would put the focus back on a test of more significant long-term resistance zone at 1236/38– look for a larger reaction there IF reached.
