Is Friday’s breakout on the verge of failing, or will gold buyers step in to save the day again?
Find out in today’s XAUUSD video, where I break down how I’m trading gold this week and share the latest insights on the US Dollar Index (DXY).
Last week, I shared a video about XAUUSD highlighting the potential for a retest of the October 2023 channel support at $2,525.
This area also aligns with a weekly imbalance from last September, and a move to $2,525 would complete the symmetry that began in 2023.
The key trigger for a gold correction, as I discussed, was a sustained break below $2,664.
However, thanks to Friday’s strong US jobs report, XAUUSD never broke below that level and instead rallied due to inflation concerns.
As I explained in the Weekly Forex Forecast, gold’s rally came despite the stronger dollar, driven by fears of rising inflation.
Fast forward to this week, and gold is already testing the $2,664 support following Friday’s bullish breakout.
In my experience, immediate retests like this, combined with weak buying pressure, often signal the start of a bearish reversal.
That said, $2,664 is once again serving as a key support level today.
For gold to deliver the much-anticipated correction, sellers need to push the price below $2,664 on a 4-hour and daily closing basis.
If that happens, targets like $2,584 and $2,525 could come into play later this month.
On the other hand, if gold bulls defend $2,664 this week and close above $2,675 today, it’s hard to make a bearish case.
That said, the price action early this week looks more like exhaustion from bulls than follow-through from Friday’s breakout.
