The technical outlook for gold (XAU/USD): Bullish over $1,850
Prices of gold recovered after overcoming a significant technical obstacle. Bulls in the XAU/USD market aim for Fibonacci resistance from the last advance of over $1,880. For the time being, psychological support and resistance help to influence price activity.
(XAU) rises on dollar uncertainty; can bulls reach $1,880?
After pushing prices back above $1,850, gold prices concluded the week, holding onto an expected 2.6% increase. Economic data added to the pressure on the precious metal as fundamentals continued to influence sentiment.
Prices increased after the XAU/USD saw an astounding 15% comeback from the November low ($1618.3) as the market was bullish to start the new year.
However, the publication of the December FOMC minutes and encouraging job statistics gave the Dollar some short-term reprieve after it hit a high of $1871.3 on Wednesday. Before the release of US non-farm payrolls, commodities prices continued to move carefully. The yellow metal prices hit a weekly low of $1829.9 before soaring upward.
XAU/USD Daily Chart for Gold
A breach of $1880 might pave the way for a retest of $1900 as bulls get ready to take on the next significant hurdle of resistance at the weekly high of $1875. The weekly chart shows how these levels served as resistance and support during the last two years, but the Dollar will likely play a role in whether bullish or bearish momentum develops.
XAU/USD Weekly Chart for Gold
Gold’s Technical Levels (XAU/USD)
| SUPPORT | RESISTANCE |
|---|---|
| S1: $1,850 – $1,848.6 | R1: $1,875 (weekly high) |
| S2: $1,829.9 (weekly low) | R2: $1,880 (psychological level) |
| S3: $1,800 | R3: $1,900 |