GOLD : Recovery on Hold

(Wed, 24 Mar 2021). Gold prices are down nearly 1% since the start of the week with XAU/USD attempting to snap a two-week rally off technical support. Although further upside may still be likely near-term, the recovery remains vulnerable while below broader downtrend resistance. These are the updated targets and invalidation levels that matter on the gold weekly charts into the close of the month.

GOLD PRICE CHART - XAU/USD WEEKLY

Notes: In my last Gold Weekly PriceOutlook we noted that the XAU/USD, “breakdown has now responded to the first major hurdle at confluence Fibonacci support. From at trading standpoint, look for topside exhaustion ahead if 1767 IF price is indeed heading lower…” An early-month rebound yielded a rally of nearly 4.7% with gold registering a high at 1755 before exhausting last week. Was that just a relief rally?

Key support remains unchanged at 1682/89 backed by the 100% extension of the August decline at 1649 – note that this region converges on multiple trendlines and is an area of interest for possible downside exhaustion IF reached. Resistance remains at the 50% retracement of the 2020 range / 61.8% extension at 1763/67 with broader bearish invalidation unchanged at the highlighted slope confluence around ~1800.

Bottom line: A rebound off key lateral support leaves gold mid-range here and in a precarious position into the close of the month. From a trading standpoint, our outlook remains unchanged and we’re on the lookout for a possible exhaustion high ahead of 1767. Ultimately a break of the lows would be needed to mark resumption towards more significant uptrend support – look for a larger reaction there IF reached.

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