Gold prices are slightly lower this week with the precious metal down 0.3% ahead of the New York close on Friday. Although the broader focus is higher, GLD remains vulnerable near-term while below a major uptrend resistance. These are the updated targets and invalidation levels that matter on the Gold (XAU/USD) weekly price chart heading into the close of the month. Review my latestWeekly Strategy Webinar for an in-depth breakdown of this gold price setup and more.
New to Gold Trading? Get started with this Free How to Trade Gold -Beginners Guide
Gold Price Chart – XAU/USD Weekly
Notes: In my last Gold Weekly PriceOutlook we noted that XAU/USD was, “in a multi-week consolidation pattern just below resistance- look to the break for guidance. From a trading standpoint, the risk remains for a move lower before resumption of the broader uptrend.” Nearly two weeks later and Gold has continued to drift with the broader long-bias still at risk into the close of the month.
Initial weekly support rests at 1380 and the 2016 high-day close at 1366 with broader bullish invalidation 1350. Topside resistance objectives unchanged with a breach / close above 1433 exposing subsequent resistance targets at the 100% extension at 1451 and the 50% retracement of the decline off the record highs at 1483.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Bottom line: While the broader outlook remains weighted to the topside, Gold prices remain vulnerable for further weakness near-term after reversing off longer-term resistance targets last week at 1451. From a trading standpoint, looking for a deeper correction in the medium-term to ultimately offer more favorable long-entries closer to trend support. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trading levels.
Even the most seasoned traders need a reminder every now and then-Avoid these Mistakes in your trading
Gold Trader Sentiment (XAU/USD)
- A summary of IG Client Sentiment shows traders are net-long Gold – the ratio stands at +2.46 (71.1% of traders are long) – bearish reading
- Long positions are 0.3% higher than yesterday and 19.2% higher from last week
- Short positions are 0.7% lower than yesterday and 16.2% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Traders are further net-long than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger Spot Gold-bearish contrarian trading bias from a sentiment standpoint.
See how shifts in Gold retail positioning are impacting trend- Learn more about sentiment!
Previous Weekly Technical Charts
Learn how to Trade with Confidence in our Free Trading Guide
— Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex