Contents
- Market Recap
- Current Price Action and Trends
- Price Level:
- Trend:
- Key Levels:
- Support:
- Resistance:
- Long-Term Target:
- Trading Strategy for XAU/USD
- Entry Points
- Pullback Entry:
- Breakout Entry:
- Risk Management
- Stop Loss (SL):
- Take Profit (TP):
- Key Indicators to Monitor
- RSI:
- Moving Averages:
- Rationale for Strategy
- Bullish Drivers:
- Volatility:
- Final Advice
- Final Word:
Market Recap
Gold prices remain volatile amid shifting geopolitical landscapes and economic uncertainty, making it an ideal time to trade XAU/USD through trusted platforms like Exness. Recent price action reflects a tug-of-war between bullish safe-haven demand and bearish profit-taking.Current Price Action and Trends
Price Level:
Gold is trading near $3,220 per ounce (as of May 19, 2025), recovering from last week’s 3% drop triggered by the US-China tariff pause. The metal reached an all-time high of $3,500 in April 2025, but technical indicators signal potential correction risks.Trend:
Mixed signals dominate: short-term bearish momentum from overbought RSI levels and MACD divergence contrasts with long-term bullish targets from hedge funds of $3,700–$4,000.Key Levels:
Support:
- Major psychological support at $3,000 (critical pivot point for medium-term trends).
- Intermediate support at $3,055 (break below could accelerate downside).
Resistance:
- Short-term resistance near $3,220–$3,245 (recent consolidation zone).
- Key resistance at $3,400 (bullish breakout target if upward momentum resumes).
Long-Term Target:
While institutions project $3,700–$4,000, technical analysis warns of potential reversal if $3,000 breaks definitively.Trading Strategy for XAU/USD
Entry Points
Pullback Entry:
Enter long positions at $3,080–$3,100 if price retraces toward the 50-day EMA, targeting $3,300. This aligns with Elliott Wave analysis suggesting corrective phases followed by upward resumption.Breakout Entry:
Trigger long positions above $3,220 with confirmation through increased volume, aiming for $3,400. Avoid false breakouts; wait for daily close above resistance.Risk Management
Stop Loss (SL):
Set SL at 1.5–2% risk (i.e., $3,150 for pullback entries, $3,180 for breakouts). Curl SL dynamically as price reaches partial targets.Take Profit (TP):
Aim for 1:2 risk-reward ratio:- TP1: $50–$70 profit (cover 50% position).
- TP2: $100–$150 for the remainder (if momentum holds).
Key Indicators to Monitor
RSI:
Current RSI shows overbought conditions (needs correction). Watch for reversal divergence signals.Moving Averages:
The 50-day EMA ($3,000 area) acts as critical support. A weekly close below this level signals trend reversal.Rationale for Strategy
Bullish Drivers:
Weak US economic data, expectations of Fed rate cuts, and safe-haven demand post-Moody’s downgrade.Volatility:
High due to contrasting narratives: US fiscal risks vs. easing US-China tensions.Final Advice
Trade cautiously this week, prioritizing $3,000 as the line in the sand. A close above $3,220 confirms bullish momentum, while failure to hold $3,000 opens doors to $2,900–$2,950. Use trailing stops to lock gains if gold retests $3,400. Monetize profits partially before major resistance, as Elliott Wave patterns suggest limited upside potential.Final Word:
Gold’s fate hinges on Fed policy clues and geopolitical stability. Stay agile—plan for both scenarios but favor long positions on dips, given the broader upward trajectory since January 2025.