XAUUSD Gold Forecast And Technical Overview

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Fundamentally Gold Forecast:

The gold market’s main concerns are now the potential economic fallout from the escalating trade war rhetoric and the hawkishness of the Federal Reserve’s rate hike path.

Some analysts are much more positive on Gold due to the trade war tensions and its risks on global economic growth, however, “safe-haven” still flows into the U.S. dollar.

The Dollar Index ended the week at 93.96. Markets focused on what the Fed rate hikes will be and how hawkish Fed will be.

Personally, what I see is gold bottoming after a major selloff and the U.S. dollar levelling off following after a rally. We might see DXY settled 93-95 range soon.

I believe the current level of 1250 is a good long entry point for midterm traders.

Technically:

As seen in the H4 chart, Gold ended the week at 1254 just below the EMA 50, in the lower channel of the BB. RSI is neutral.

A bullish triangle breakout – possible projected breakout level is 1257 which is confirmed by MM 1/8 Weak, Stall & Reverse- may carry the price 1265 USD. At 1265, MA 100 and MM 2/8 Pivot / Reverse stands as a strong intraday resistance.

1250 is the strong support level of Monday.

As seen in the below H4 Chart; we have a bearish butterfly harmonic pattern forming and would be completed at D 1264.

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[Chartreaderpro]

XAUUSD Gold Forecast : A bearish trend reversal?

Our members know that we are bullish longterm on Gold Futures. However, there are a few signs which make us think of a bearish trend reversal.

Fundamentally:

XAUUSD failed to end the week in positive territory by ignoring all positive fundamental data, including a rise in geopolitical tensions, inflation pressures and negative real interest rates. Most of the market players think that the gold price to be undervalued and expect a noticeable recovery in the second half of the year.

It looks like the investors throw positive fundamentals out as the U.S. economy, rising interest rates and a rising U.S. dollar continue to dominate the market.

However, even with falling DXY on Friday, gold was unable to sustain any price gains.

Traditionally, the gold market weakens in the summer. The market still has a few weeks more and this can push the prices lower for a while.

Technically:

As seen on the Daily Chart, during the rally, we saw a series of higher lows. At the recent selloff, we saw for the first time gold prices have traded to a lower low than the previous low different than other corrective periods since 2015.

Another signal is the death cross of EMAs as seen in the chart.

On the smaller chart timeframes:

XAUUSD Gold is under a strong bearish pressure. XAUUSD need to break above 1250 to continue its bullish move. And 1257 is the next and more important resistance.

The real problem will begin with the breakout of 1236 support. A strong bearish price action may take place targeting 1205 USD.

Key Levels:

Upside : 1250 1256 1266
Downside: 1236 1226 1215

Personally, I do not believe Gold can break below 1200 USD. Gold Bulls will be waiting there. It’s gonna be an interesting week. I won’t be surprised if Gold hits 1226 USD this week.

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