Gold Silver Reports – Technical Report: In my last Gold Weekly Technical Outlook we noted that prices were, “poised for a reversal off the yearly high-week close and leaves the risk lower heading into the April open.
From trading standpoint, look for a reaction in price on a move towards confluence support at 1275 or 1258 – both levels of interest for possible price exhaustion.” Price registered a low at 1280 today with the decline responding to near-term confluence support at the 100-day moving average / January trendline.
Key support remains at, 1275/76, “where the objective yearly opening-range low converges on the 38.2% retracement of the 2018 advance and former pitchfork resistance.” Daily resistance steady at 1302 with a breach / close above the February trendline (bearish invalidation) needed to shift the focus back to the topside targeting 1322.
A closer look at price action shows Gold trading within the confines of a near-term descending pitchfork formation extending off the March highs with XAU/USD attempting to break below the lower parallel today in New York trade. There are a few slopes at play here, but the general threat is for a near-term recovery within the confines of this multi-day descending channel (red).
Initial resistance stands at 1293 with a topside breach above 1297 needed to challenge 1302- both areas of interest for possible exhaustion. Yearly open support steady at 1280 – weakness beyond this threshold targets a more significant confluence at 1275/76- look for a larger reaction there IF reached (are of interest for possible long-entries).
The immediate threat is for a near-term recovery here but ultimately, we’re looking for low final low in price while below 1302. From a trading standpoint, look for exhaustion on a rally towards the March trendline targeting the yearly open. A move lower may offer more favorable long-entries closer to the 2019 range lows. Review our latest Gold 2Q forecasts for a longer-term look at the technical picture for XAUUSD.