In a surprising turn of events that helped defuse global economic tension, the United States and China announced a significant tariff rollback on May 12, ending months of trade hostility. The agreement, which includes a 90-day reduction on mutual tariffs, sent shockwaves through international markets, boosting risk appetite and triggering a downward move in gold prices.
XAU/USD plunged to $3,121, driven by a fading demand for traditional safe-haven assets like gold as geopolitical fears eased.
Recap: Previous Week’s Gold Forecast
In last week’s gold forecast, crypto.news correctly identified a 1-hour selling zone, from which gold dropped a massive 1,420 points. Likewise, a weekly Fair Value Gap (FVG) buying zone was highlighted, where gold rebounded by 827 points.
This precise market behavior sets the stage for this week’s action as traders now pivot their focus to new entry zones and macroeconomic events.
Key Economic Events: PMI Data in Focus
While this week lacks major U.S. data releases, two events could impact XAU/USD on Thursday, May 22:
- Flash Manufacturing PMI
- Flash Services PMI
These two indicators are key barometers of economic health:
- Strong PMI readings tend to boost the U.S. dollar and suppress gold prices.
- Weak PMI data devalues the greenback, offering support to gold prices.
Given this, gold traders should remain alert to any surprises in PMI data that could shift market momentum.
Gold High Timeframe (HTF) Technical Overview
Gold has closed above its weekly FVG, signaling renewed bullish potential. On the weekly chart, the next price targets are:
- $3,260 recent weekly high
- $3,328.86 an untested resistance level from prior weekly candles
This indicates that gold’s bullish structure remains intact as long as it holds key support zones.
XAU/USD Forecast: May 19–23, 2025
Bullish Scenarios: Buying Zones
- 1H Timeframe: Look for long entries around the bullish order block of $3,129.85–$3,152.56
- 4H Timeframe: Deeper retracement buy zone lies between $3,098–$3,038, aligned with a daily FVG
- Invalidation Level: A break below $2,956 would invalidate the current bullish thesis and favor short setups
Bearish Scenarios: Selling Zones
- 4H Resistance: Key sell area identified at $3,284–$3,325, coinciding with FVG and structure resistance on the 4H chart
Trading Strategy and Investment Recommendations
Support Levels
- $3,098–$3,038 (4H support, daily FVG)
- $3,129.85–$3,152.56 (1H bullish order block)
Resistance Levels
- $3,284–$3,325 (4H structure and FVG resistance)
✅ Strategy Summary
- Buy on dips at higher timeframe levels where structure supports continuation.
- Sell at lower timeframe resistance zones for short-term scalps or hedging.
- Monitor U.S. PMI data for directional cues, especially on Thursday.
Gold’s technical landscape suggests bullish potential despite the recent sell-off following the U.S.-China trade breakthrough. With strong support levels holding and macroeconomic data looming, traders should remain flexible but cautiously bullish heading into the week.
