Gold prices head into the start of Q3 trading just above the objective yearly open with XAU/USD still holding multi-year uptrend support. While the broader outlook remains constructive, the threat for a deeper correction in the medium-term rises after numerous failed attempts to break resistance. These are the levels we’re tracking into the open of Q3.
Gold Price Technical Analysis: Monthly Timeframe (November 2008 to June 2022) (Chart 1)
Source – Trading View; Prepared by Michael Boutros
The March rally failed just ahead of the record highs at 2075 with the subsequent pullback taking prices back into yearly open support at1829. IF prices are indeed heading higher, losses would need to be limited to the 2008/2015 slope parallel with broader bullish invalidation set to the March 2021 monthly close low in 1707.
Gold Price Technical Analysis: Weekly Timeframe (September 2018 to June 2022) (Chart 2)
Source – Trading View; Prepared by Michael Boutros
A closer look at the weekly chart shows gold resting just above a key Fibonacci confluence we’ve been tracking at 1818/29. We’re looking for possible inflection off this range with a close below the low-week close at 1791 needed to shift the focus towards confluent uptrend at 1729 — an area of interest for possible downside exhaustion IF reached.
Key Fibonacci Confluence
Resistance stands at the 38.2% retracement of the March decline / 2021 high-close at 1903- a breach / weekly close above this threshold would be needed to invalidate the multi-month downtrend with such a scenario exposing the 61.8% retracement at 1962 and the yearly high-week close at 1988.
Bottom Line
Gold is resting on a key pivot range around the yearly open. The focus heading into Q3 is on a break of the 1818-1903 range with the threat weighted to the downside while below the March trendline. We’re on the lookout for an exhaustion low in the third quarter – ultimately a larger pullback may offer more favourable opportunities closer to uptrends support.
