The gold price is consolidating a two-day downtrend below the $1,800 level, as bears gather strength ahead of a new leg lower. A quiet calendar is also contributing to Gold’s lacklustre performance. Meanwhile, investors become cautious, supporting safe-haven demand for the US Dollar and, as a result, limiting the bright metal’s recovery efforts. The US Dollar continues to benefit from recent strong US ISM Services PMI and Factory Orders data, which have renewed expectations of more Federal Reserve (Fed) rate increases in the coming year. The stalled upside in US Treasury yields across the curve, on the other hand, is allowing gold to stage a modest comeback. In the face of a lack of top-tier US economic data and the Fed’s ‘blackout period,’ broad market sentiment and Fed rate hike expectations will continue to play a key role in influencing the USD-denominated gold price.
Key levels to monitor for the gold price
According to the Technical Confluence Detector, the gold price is preparing for a large break to the downside, with the initial support at the SMA50 four-hour at $1,768.
The next significant support is seen around $1,765, which is the intersection of the Fibonacci 61.8% one-week, the previous day’s low, and the SMA100 four-hour.
If the aforementioned support fails to hold, a sharp drop toward the pivot point one-week S1 at $1,758 cannot be ruled out.
Alternatively, gold buyers must establish a strong foothold above the Fibonacci 23.6% one-day and SMA5 one-day confluence at $1,777.
Further gains are possible if the Fibonacci 38.2% one-week at $1,781 is broken. The next stop for bulls is expected to be around $1,783 at the intersection of the Fibonacci 38.2% one-day and SMA100 one-hour.
This is how it appears on the tool.
Concerning the Technical Confluences Detector
The TCD (Technical Confluences Detector) is a tool for locating and highlighting price levels where indicators, moving averages, Fibonacci levels, Pivot Points, and so on are converging. Short-term traders will look for entry points for counter-trend strategies and will hunt a few points at a time. If you are a medium-to-long-term trader, you can use this tool to predict where a medium-to-long-term trend will stop and rest, where to unwind positions, and where to increase your position size.