Market Recap
The last week has seen gold prices oscillate between consolidation and volatility, with XAU/USD pulling back over 2% from technical resistance as of May 31. However, traders should note that breaking the $3,500 psychological level could trigger a bullish surge, making this a pivotal moment for positioning. For those seeking a reliable platform to execute this strategy, Exness offers trading tools tailored to both newcomers and seasoned professionals.
Current Price Action and Trends
Price Level:
As of June 3, 2025, XAU/USD is trading near $3,480, reflecting a cautious consolidation phase after recent volatility.
Trend:
The price action remains within a broader ascending channel, suggesting a bullish bias. However, short-term resistance is currently capping gains.
Key Levels:
- Immediate support: $3,450 (recent swing lows)
- Critical resistance: $3,500 (multi-year high)
- Long-Term Target: $3,600 (projected if breakout occurs)
Support:
A strong support zone exists at $3,450-$3,470, where buyers may step in to defend the upward trend.
Resistance:
The $3,500 mark remains a key technical barrier that could trigger stop-loss orders or profit-taking if breached.
Trading Strategy for XAU/USD
Entry Points
- Pullback Entry: Buy on dip toward $3,450-$3,470 with confirmation from bullish RSI divergence.
- Breakout Entry: Buy above $3,500 closing basis with increased volume.
Risk Management
- Stop Loss (SL): Place below $3,420 (10-15 pips below entry) to protect against false breakouts.
- Take Profit (TP): Tiered exits at $3,550 (1:1 risk/reward), $3,580 (1:2), and $3,600 (1:3).
Key Indicators to Monitor
- RSI: Look for readings above 65 in the 4-hour chart to confirm bullish momentum.
- Moving Averages: 50-period SMA ($3,475) acting as dynamic support.
Rationale for Strategy
Bullish Drivers: Safe-haven demand driven by geopolitical risks and inflation fears could reignite upward pressure.
Volatility: Monitor June 6, 11, and 18 as potential catalyst dates for NFP, CPI, or Fed policy commentary.
Final Advice
Given the current setup, traders should prioritize capital preservation while positioning for a potential breakout. A buy-on-pullback strategy offers better risk/reward with defined stop levels. Maintain strict discipline β close positions if the $3,420 support breaks decisively, as this would signal a shift toward bearish pressure.
Always balance risk and reward ratios, and never overleverage. The technical landscape suggests patience β this is a market where timing entry accurately may mean the difference between marginal gains and substantial profits.
