Contents
Market Recap
Gold prices have experienced significant volatility in recent days, marked by a sharp drop from record highs in early May 2025. As of May 8th, gold is trading around $3,390, slightly trimming earlier losses but still pressured by a resilient USD and cautious Fed policy. For traders seeking opportunities in this dynamic market, Exness offers competitive trading conditions for XAU/USD, including tight spreads and reliable execution.Current Price Action and Trends
Price Level:
Gold is currently hovering near the $3,350 psychological support level, having dropped from two-week highs of $3,435 due to profit-taking and USD strength.Trend:
The short-term trend has shifted to bearish following the breakdown below the parabolic structure and a failed attempt to reclaim the $3,435 resistance. Long-term fundamentals, however, remain bullish due to central bank demand and geopolitical risks.Key Levels:
- Support: $3,350 (psychological level) and $3,223 (May 2 low)
- Resistance: $3,435 (recent high) and $3,494 (channel support-turned-resistance)
- Long-Term Target: $3,500 โ $3,600 (April 2025 all-time highs and UBS target)
Trading Strategy for XAU/USD
Entry Points
Pullback Entry: Look for buying opportunities on dips toward $3,350, provided the RSI remains above 50 (currently near 61.50). A hold above this level could trigger a rebound toward $3,400.Breakout Entry:
A sustained close above $3,435 would invalidate bearish momentum, potentially targeting $3,494 resistance.
Risk Management
Stop Loss (SL):- Bullish trades: Place SL below $3,310 (3% risk) to account for volatility.
- Bearish trades: SL above $3,470 (2.5% risk).
Take Profit (TP):
- First TP: $3,400 โ $3,410 (strong prior support zones)
- Second TP: $3,435 โ $3,494 (resistance and channel target)
Key Indicators to Monitor
- RSI: Watch for divergence or a drop below 50 to confirm bearish momentum.
- Moving Averages: The 21-day SMA ($3,283) served as critical support; a break below could accelerate declines.
Rationale for Strategy
Bullish Drivers:- Safe-haven demand amid escalating US-China tariffs and Fed uncertainty.
- Physical buying from central banks and ETFs, which pushed gold up 29% YTD.
Volatility:
High due to Fed policy statements, geopolitical developments, and leveraged positioning.
Final Advice
- Trade Direction: Prefer longs on dips to $3,350 with tight stops, as the RSI suggests buying interest persists.
- Execution: Enter partial positions now and scale in if $3,350 holds; avoid breakout trades until $3,435 is reclaimed.
- Catalysts: Monitor Fed comments on inflation/unemployment and US-China trade negotiations.
Goldโs intraday setup favors scalping strategies with defined risk. Tighten stops once the first TP is hit, and let secondary positions run toward resistance levels.
