In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. Gold[1] is down nearly 13% from the yearly highs with price trading just above long-term structural support heading into the close of the third quarter. Here are the key targets & invalidation levels that matter on the Gold (XAU/USD) weekly chart.Review this week’s Strategy Webinar[2] for an in-depth breakdown of this setup and more.
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Gold Weekly Price Chart
Notes: In Last week’s Gold Price Outlook[4], we highlighted a month-long consolidation pattern in XAU/USD and heading into this week’s FOMC[5] interest rate decision, our focus was on a breakout[6] of this formation. A surge in the US Dollar[7] post-Fed fueled further losses in bullion with price breaking below triangle support & the monthly opening-range[8] yesterday.
The decline is testing initial support at the 2018 low-week close at 1184 with a more significant confluence region just lower at 1172. This level is defined by the 61.8% retracement[9] of the entire late-2015 advance and converges on the 50-line of the descending pitchfork formation we’ve been tracking off the 2017 & 2018 highs.
A break below this threshold would be needed to mark resumption of the broader downtrend - note that this would necessitate a break below broader pitchfork support (blue) with such a scenario exposing subsequent objectives at 1124/30. Initial resistance stands at 1204
