Contents
Market Recap
Gold prices have experienced significant volatility in recent days, with XAU/USD falling for three consecutive sessions to hit a two-week low near $3,232. This decline occurred despite weakening US economic data and expectations of Federal Reserve rate cuts, as optimism about US-China trade talks buoyed risk assets and strengthened the dollar. While gold remains in a long-term bullish trend, short-term headwinds persist. For those seeking to trade gold, Exness offers a robust platform for forex trading with competitive spreads and reliable execution.Current Price Action and Trends
Price Level:
Gold is currently trading near $3,230, testing critical support levels amid bearish momentum.Trend:
A bearish correction is underway within the broader bullish channel, driven by USD strength and reduced safe-haven demand.Key Levels:
- Immediate Support: $3,260–$3,265 (38.2% Fibonacci retracement and psychological floor).
- Resistance: $3,300–$3,328 (previous swing high and upper boundary of the recent range).
- Long-Term Target: $3,500–$3,400 (psychological milestone and prior all-time high).
Trading Strategy for XAU/USD
Entry Points
- Pullback Entry: Wait for a bearish retest of $3,260–$3,265. A bullish reversal here (candlestick confirmation) would align with the Fibonacci support. Target $3,300 first, then $3,350.
- Breakout Entry: If XAU/USD breaks above $3,350 (violent rejection of resistance), position for a bullish move toward $3,400.
Risk Management
- Stop Loss (SL): Place below $3,260 for pullback trades to limit downside risk. For breakout positions, set SL below $3,340.
- Take Profit (TP): Set a partial CP at $3,300 and full TP at $3,350 (reward-risk ratio of 1:2).
Key Indicators to Monitor
- RSI: A reading below 40 could signal oversold conditions, supporting a bounce. Rejection at 50 would confirm bearish pressure.
- Moving Averages: Watch for a golden cross pattern (50-day EMA > 200-day EMA) as confirmation of bullish momentum.
Rationale for Strategy
- Bullish Drivers: Expectations of Fed rate cuts and weak US economic data (e.g., Q1 GDP at 0.4% vs. prior 2.4%).
- Volatility: Upcoming US Nonfarm Payrolls (Friday) and ISM PMI data will determine dollar strength and gold’s trajectory.
Final Advice
Gold’s near-term outlook hinges on today’s US jobs data and the USD’s reaction. While the long-term trend remains bullish, short-term traders should prioritize pullback entries at $3,260–$3,265 with tight risk management. Avoid overleveraging until a clear bullish reversal is confirmed. For updates and execution, use Exness.