Contents
Market Recap
Gold prices have shown volatility recently, dropping from a peak of $3,500 to $3,211 before stabilizing near $3,320 as of May 11, 2025. Factors such as China’s holiday-induced liquidity drought, stronger-than-expected US jobs data, and cautious Federal Reserve policy have influenced price action. For traders, this dynamic presents opportunities—especially when leveraging platforms like Exness, which offers precision tools for navigating commodities like XAU/USD.Current Price Action and Trends
Price Level:
Gold is currently trading at $3,320, rebounding slightly from recent lows but struggling to break resistance.Trend:
Long-term trend remains bullish, driven by inflationary pressures and geopolitical risks. Short-term, price action is range-bound, influenced by Fed rate uncertainty and US-China tariff negotiations.Key Levels:
- Support: $3,200 (critical psychological level)
- Resistance: $3,500 (April 2025 peak)
- Long-Term Target: $3,800 (analyst projections for late 2025)
Trading Strategy for XAU/USD
Entry Points
- Pullback Entry: Buy on dip toward $3,200–$3,250, targeting a bounce to $3,400 as volatility unwinds.
- Breakout Entry: Wait for a sustained close above $3,350, signaling a bullish continuation toward $3,500.
Risk Management
- Stop Loss (SL): Place SL below $3,200 (1.5–2% risk per trade) for pullback entries; below $3,300 for breakout entries.
- Take Profit (TP): Set TP1 at $3,400 (2:1 risk-reward) and TP2 at $3,500 (3:1 ratio). Use trailing stops beyond $3,450 to lock gains.
Key Indicators to Monitor
- RSI: Watch for oversold readings (below 30) near $3,200 for bullish reversals or overbought signals (above 70) near resistance.
- Moving Averages: 50-day SMA (~$3,250) and 200-day SMA (~$2,900) provide trend context. A close above the 50-day SMA suggests upside momentum.
Rationale for Strategy
- Bullish Drivers: Sticky inflation, geopolitical tensions, and potential Fed rate cuts later in 2025 continue to underpin gold’s value.
- Volatility: Upcoming US-China tariff talks and Fed commentary could trigger sharp price swings. Stay alert to news catalysts.
Final Advice
DO NOT trade impulsively. Gold’s correlation with risk sentiment is high, and missteps can erase gains. For today’s XAU/USD trade:- Buy on pullback to $3,200–$3,250 with SL below $3,200.
- Close partial positions at $3,400; let the remainder ride toward $3,500.
- Avoid overleveraging—gold’s volatility demands prudent position sizing.
- Monitor updates on US-China trade talks (May 10–11) and Fed Powell’s remarks for near-term cues.
This strategy balances risk and reward, leveraging gold’s structural tailwinds while respecting technical boundaries. Stay disciplined, and let the market confirm your thesis.
