XAU/USD outlook: Gold bounces from a multi-week low but recovery faces strong barriers

XAU/USD

Gold price bounced from one-month low ($3268) on Thursday, recovering the large part of Wednesday’s 1.6% drop.

Gold was deflated by stronger dollar which rallied on recent US trade deals and expectations that the Fed will keep its hawkish stance (confirmed in the statement after policy meeting on Wednesday.

However, the latest tariff threats by President Trump revived uncertainty and lifted gold price.

The latest drop emerged after a false break above triangle upper boundary and broke through very significant supports including daily cloud top ($3342), triangle support line ($3327), cloud base ($3310) and psychological $3300 level, with weakness being contained by rising 100DMA ($3267).

Fresh recovery has returned above $3300 so far but still faces all broken supports, now acting as solid barriers.

Lift above triangle lower trendline (currently at $3334) is needed to ease downside pressure, but sustained break above daily cloud (top currently lays at $3361, also near 50% retracement of $3438/$3268 bear-leg) will be required to confirm reversal and bring bulls in play.

Daily studies are mixed as 14-d momentum is in the negative territory and most of MA’s are in bearish setup, but north-heading RSI and Stochastic about to emerge out of oversold zone that keeps prospects for further recovery.

In such scenario, recent weakness would be marked as positioning for stronger advance, while failure to regain key resistances would keep the downside vulnerable.

The strength of key factors that drive gold price (positive – geopolitical situation, uncertainty over economic condition, political situation, tariffs and negative – high interest rates, strong dollar) will play a key role in defining gold’s near term direction.

Res: 3334; 3353; 3361; 3381.
Sup: 3267; 3247; 3207; 3199.

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