XAU/USD outlook: Limited pullback from new record high keeps larger bulls intact
XAU/USD
Gold price stays below $4000 mark for the second consecutive day, as traders collected profits after the metal broke through psychological barrier and hit new all-time high at $4059 on Wednesday.
Overbought daily studies and significance of $4000 barrier prompted partial profit-taking, with limited dips (Fibo 23.6% of $3627/$4059 upleg containing) seen so far, despite Thursday’s completion of bearish engulfing pattern on daily chart.
Current easing is expected to provide better levels to re-enter bullish market, as larger bullish structure remains intact.
Key factors that drive gold price (expectations for more Fed rate cut, high geopolitical and macroeconomic uncertainty) remain unchanged, with some relief expected from a peace agreement between Israel and Palestine, if the deal will be signed and conditions followed.
The yellow metal remains on track for the eight straight weekly gain (nearly 3% advance this week) that supports strong bullish outlook.
Weekly close above $4000 would reconfirm bullish structure and signal that short and shallow correction is likely over, shifting focus fully to the upside.
Conversely, failure to clear $4000 barrier on Friday would keep the downside vulnerable for extended consolidation / limited correction) with next key support at $3900 zone (psychological / near-Fibo 38.2%) expected to contain extended dips and keep larger bulls in play.
Res: 4015; 4028; 4059; 4100.
Sup: 3957; 3944; 3926; 3900.
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.
