Gold Price Outlook: XAU/USD November Breakout Awaits

Gold prices are poised to mark the third consecutive weekly advance with the precious metal rallying 0.45% to trade at 1510 ahead of the New York close on Friday. The gains keep price within the confines of a critical range in gold just below major confluence resistance heading into the November open. These are the updated targets and invalidation levels that matter on the XAU/USD charts next week. Review my latestWeekly Strategy Webinar for an in-depth breakdown of this setup and more.

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Gold Price Chart – XAU/USD Weekly

Weekly Gold Price Chart

Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview

Notes:In my last Gold Weekly Price Outlook we noted that, “Gold prices are coiling just above longer-term slope support – taking a more neutral stance here while noting the risk for a deeper pullback while below 1522/26.” Despite the added volatility fueled this week’s FOMC interest rate decision and a blow-out US Non-Farm Payroll report, gold has remained within the confines of the October opening-range just below key resistance heading into the open of November trade– and the wait for a broader break either for-or-against the primary trend continues.

Key support rests at 1451/61 – a break / weekly close below would be needed to suggest that a larger correction is underway in gold, while strength surpassing 1526 would mark resumption of the broader uptrend. Subsequent topside resistance objectives at 1558 with key resistance at the 61.8% retracement at 1586. For now, the monthly price compression remains in focus with gold holding within last week’s range post-NFPs on Friday.

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Bottom line:The immediate focus is on a break of the October range heading into the November open – keeping a more neutral stance after this week’s rebound. Form a trading standpoint, another washout lower is favored, but the technical structure and recent shift in sentiment would allow for resumption IF the 1522/26 resistance zone compromised. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trading levels.

Gold Trader Sentiment – XAU/USD Price Chart

Sentiment Chart for XAUUSD

  • A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +1.66 (62.39% of traders are long) – bearishreading
  • Long positions are7.03% lower than yesterday and 10.05% lower from last week
  • Short positions are11.74% higher than yesterday and 2.41% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long.

See how shifts in Gold retail positioning are impacting trend- Learn more about sentiment!

Previous Weekly Technical Charts

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— Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

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