Gold Price Prediction – XAU/USD Trading Around Big Resistance
Gold Price Technical Outlook: Neutral
- Gold struggles around a major resistance zone
- Levels, lines and scenarios to watch in the coming days
Gold Price Prediction – XAU/USD is testing a high level of “hidden” support
Last week, gold soared, but quickly found itself in a major resistance zone. Summer gold dating has bumped into the low 1830s four times. The most recent case occurred just a few weeks ago.
If gold fails to overcome resistance convincingly quickly, expect a lower turn and more choppy price action to ensue. A turn lower would quickly put the 200-day moving average back in play at 1802, but this widely watched average is rapidly losing impact as gold swings around it.
On the top, however, a breakout and close in the upper 1830s or better on a daily basis could kick gold into high gear. There are a few trendlines that we will need to consider right away. The August and November 2020 trend lines arrive between approximately 1850 and 1860.
A break above these lines will highlight the November high at 1877 as the next level of resistance. Conviction is low, however, that we will see a strong follow-up. It has been a while since gold has been a two-way conviction market, so until it provides evidence of regime change, I will remain skeptical.
The play that might be interesting is if we see gold break through resistance in the low-mid 1830s and then quickly fall back below. This could set up short-term traders with a short-term opportunity that is consistent with the overall directionless behavior that gold has been exhibiting.
Gold Price Daily Chart
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX