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XAUUSD: We’ve Seen This Kind of Consolidation Before

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XAUUSD (gold) is pushing higher this week after consolidating since early August.

Despite the aggressiveness of that move lower from 2075, I’ve continued to like XAUUSD higher over the long term.

As I mentioned in last weekend’s forex forecast, this latest round of consolidation looks familiar.

Weekly time frame showing uptrend
Weekly time frame

We’ve seen gold do this before since the uptrend began in 2016.

Every round of consolidation has led to a higher high, and this time is no different, in my opinion.

XAUUSD is in the middle of a 10-year bull cycle following a four-year pullback between 2011 and 2015.

However, that doesn’t mean gold will break out this time.

We could see an exaggerated pullback into the 1790 support area, which served as resistance in 2011 and 2012.

Either way, I like gold higher in 2021.

I’m still treating it as an investment, particularly the junior gold miners that I bought back in April when the GDXJ was 28 (55 today).

I told Daily Price Action members about that investment in April.

As for XAUUSD, the pair needs to carve a higher high to confirm the break from consolidation.

That means it needs to close above 1930.

However, keep in mind that the US elections are ongoing and may not be over for some time.

That volatility could send XAUUSD lower before the next leg higher can materialize.

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XAUUSD daily horizontal levels
XAUUSD daily time frame

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8 comments
Justin Bennett says

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Deepak says

Thank you Justin for analysis

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Martin Biden says

I like your caution see how Audusd Fucked up many who especially uses unreasonable lot size after it broke the trendline

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ali says

thanks sir .

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Sarath says

Your reviews and forecast are simply superb. I have been watching your forethought quite a time. But some of the words I couldn’t follow as I am a beginner. ” That volatility could send xau/usd lower before next leg higher can materialize”. What is leg? how many legs are there? What is this means?

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Agnes says

I appreciate the heads up from your posts. Keep it up Justin

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Rene says

can you comment gold right now. I am in noce profit. But what is doing. gold and bitcoin rocket, dollar abou hard drop. What is TP for gold now?

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andrea says

I sent you a email on the 4th of November saying gold would go down to around 1751 it’s almost their

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