XAU/USD outlook: Gold tests $2000 barrier again but continues to face strong headwinds here
XAU/USD
Gold remains steady and moving around $2000 barrier which was repeatedly cracked on Friday.
Steep recovery after a text-book correction extends into third straight day, keeping the yellow metal on track for the fourth consecutive weekly gain.
The overall environment is increasingly supportive for gold, as rising bets for a pause in Fed’s policy tightening and fragile situation in financial sector, on growing fears that recent collapse of few banks might be just the beginning of deeper crisis, continue to fuel safe-haven demand.
However, as mentioned in previous comments, $2000 level presents very significant resistance and may take some more time for bulls to register a clear break higher and signal continuation of larger uptrend from 2015, which already faced two strong rejections above $2000.
Gold spiked to new record high at $2074 in Aug 2020 and retested the zone in Mar 2022, hitting $2070 high, but in both attempts failed to register a monthly close above $2000 pivot, keeping the price in extended consolidation range for over 2.5 years.
Current action is facing the same problem again and signal that bulls may need more time to consolidate for eventual firm break higher.
Weekly close below $2000 will contribute to such scenario, however, overall picture remains increasingly bullish, with dips expected to find firm ground above rising 10DMA ($1951) to keep bulls intact.
Res: 2000; 2009; 2018; 2037.
Sup: 1959; 1952; 1934; 1916.
Interested in XAU/USD technicals? Check out the key levels
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.
