Market Recap
Gold trading remains dynamic amid economic uncertainties, with Exness offering robust platforms for XAU/USD forex trading. Recent price action has shown heightened volatility ahead of critical US inflation data, testing traders’ strategies and risk tolerance.
Current Price Action and Trends
Price Level:
Gold is trading near $3,289.49 as of May 31, 2025, reflecting a 25.31% year-to-date gain but a recent retreat from April’s record highs.
Trend:
Sideways to bearish bias following a pullback from weekly highs near $3,366. The 21-day SMA at $3,292 acts as a pivotal level, with the price struggling to hold above it.
Key Levels:
- Immediate Support: $3,230 (50% Fibonacci retracement of April’s rally and 50-day SMA convergence)
- Resistance: $3,350 (psychological barrier and prior rebound peak)
Long-Term Target:
A sustained break below $3,230 could trigger a decline toward the 61.8% Fibonacci retracement at $3,168. Conversely, a bullish breakout above $3,350 may retest $3,366.
Trading Strategy for XAU/USD
Entry Points
- Pullback Entry: Look for retracements to $3,292 (21-day SMA) with bullish RSI divergence above 52. Monitor for confluence with Bollinger Band middle band support.
- Breakout Entry: Enter long on a daily close above $3,350, targeting $3,366. Short entry below $3,230 with confirmation from bearish MACD crossovers.
Risk Management
- Stop Loss (SL): Place SL 50–80 pips below key support (e.g., $3,280 for longs, $3,225 for shorts). Tighten to 20–30 pips post-entry for volatility protection.
- Take Profit (TP): Set TP1 at $3,350 (1:2 risk-reward) and TP2 at $3,366 for longs. For shorts, target TP1 at $3,230 and TP2 at $3,168.
Key Indicators to Monitor
- RSI: A drop below 50 signals weakening bullish momentum. Oversold conditions (<40) may trigger short-term bounces.
- Moving Averages: Bullish bias intact if price holds above 21-day SMA ($3,292) and EMA 21.
Rationale for Strategy
- Bullish Drivers: Safe-haven demand amid US inflation worries and central bank policy uncertainty. The 14-day RSI rebound above 50 supports short-term bullish potential.
- Volatility: US inflation data poses two-way risk – opt for smaller position sizes to mitigate downside exposure.
Final Advice
For today’s XAU/USD trade:
- Aggressive Entry: Sell on rallies toward $3,300–$3,330 if bearish MACD confirmation emerges. Watch for rejection at resistance to trigger short-term downside momentum.
- Conservative Entry: Wait for a retest and bounce off $3,230 support with RSI bullish divergence. Tighten TP levels as volatility increases.
Prioritize risk management – the 21-day SMA ($3,292) is critical for trend directionality. Adjust SL/TP dynamically based on intraday price action near key Fibonacci and SMA levels.
