- The price of Gold is strongly bullish, a new higher high could activate further growth.
- Taking out the immediate upside obstacles could bring new buying opportunities.
- Only a new lower low could signal that the price could move downwards.
Read on for our XAU/USD forecast – Gold rallied in the short term as the USD was weakened by the DXY’s sell-off. The yellow metal stands at 1,750 at the moment of writing challenging a dynamic resistance, the immediate downtrend line. It’s trapped within a temporary range, so only a breakout from this pattern may bring great trading opportunities.
The price of gold takes advantage of a weak Dollar. XAU/USD could approach and hit fresh new highs if it makes a valid breakout through the immediate resistance levels. The price jumped higher even if the US Factory Orders registered a 1.2% growth in August versus a 1.1% growth expected.
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Technically, it has slipped lower after reaching a strong resistance zone, a confluence area. Also, some better than expected US data reported on Friday forced the commodity to drop.
The fundamentals will move the rate during the week. The US ISM Services PMI, ADP Non-Farm Employment Change, Average Hourly Earnings, Unemployment Rate, and the Non-Farm Employment Change could be decisive. Some poor US data could force the price of gold to climb higher.
XAU/USD Forecast: Price Technical Analysis – Down Channel
XAU/USD failed to stabilize below the 1,750 static support and below the weekly pivot point (1,748) signalling that the bulls are still in the game. It has slipped lower after being rejected by the confluence area formed at the intersection between the 150% Fibonacci line with 1,764 former high.
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Making a valid breakout through the downtrend line could signal a breakout above the 150% Fibonacci line as well. A new higher high, jumping and closing above the 1,764 could attract even more buyers in the short term.
Moving sideways, XAU/USD has tried to accumulate more bullish energy before jumping higher. Escaping from the down channel may signal an upside continuation. Gold could extend its growth towards 1,800 if the rate closes above 1,770.58 today’s high.
The upside scenario could be invalidated by a new false breakout through the downtrend line. Also, a new lower low, a bearish closure under 1,747.78 could invalidate further growth and could bring a short opportunity.
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