XAU/USD outlook: Gold retests its record high, bulls likely to take a breather before resuming

Slobodan Drvenica Windsor Brokers

XAU/USD

Steep rally extends into the fifth straight day on Tuesday, after the metal closed above $2100 level for the first time in history on Monday.

Strong demand for safe haven bullion was sparked by further drop in the activity in US manufacturing sector and persistently weak consumer sentiment.

Bulls retested key barrier at $2141 (gold’s record high, posted on Dec 4), break of which to spark fresh acceleration higher and open way for 2200+ gains.

Meanwhile, increased headwinds at this zone should be anticipated, due to significance of resistance and strong rejection seen after last rally to this level (Dec 4 bearish daily candle with very long upper shadow), as well as strongly overbought daily studies.

Dips should be limited (ideally to find ground at $2100/$2080 zone) to keep bulls intact and offer better levels to re-enter bullish market.

Res: 2141; 2181; 2206; 2226.
Sup: 2110; 2100; 2088; 2080.

Interested in XAU/USD technicals? Check out the key levels

1. R3 2171.71
2. R2 2145.84
3. R1 2131.28
PP 2105.41
1. S1 2090.85
2. S2 2064.98
3. S3 2050.42

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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