Gold Price Outlook: XAU/USD Finds Gains Capped at $1881 Resistance

Summary:

Gold price action is steady on the day, as lack of fundamentals allows XAUUSD to trade based on prevailing market sentiment.

Gold price on the XAUUSD chart is struggling to extend gains into the 4th day, as it finds itself capped at the $1881.99 resistance level.

Gold started the day lower but was able to attract some bids on an escalation of simmering US-China tensions, as US commerce secretary Wilbur Ross confirmed that China’s chipmaker SMIC could face blacklisting.

However, continued weakness on the USD ensured that the yellow metal is seeing a balance of bids and offers, which is reflected in the doji candle formation on the daily chart as at the time of writing.

Friday’s trading session is relatively scanty and devoid of market-moving fundamentals for the USD, allowing the prevailing market sentiment to play out.

Gold price is trading 0.07% higher at the time of writing.

Technical Levels to Watch

The daily chart of the XAUUSD shows that gold price action is challenging the 1881.99 resistance, and has basically traded around that area all day. Gold price needs to clear this level to attain the next stop at 1900.76. The price must break the upper edge of the large descending channel to target 1918.68, with 1940.15 and 1954.77 lining up as additional targets to the north.

On the flip side, a rejection at 1881.99 allows sellers to target 1869.39, with 1850.78 and 1821.5 serving as immediate downside targets. The lower border of the broader channel interacts with 1748.40. For this price level to be attained, sellers would need to drive gold prices through the 1788.90 and 1762.51 support levels.