Gold Price Forecast: XAU/USD eyes smooth run-up towards $1,980 – Confluence Detector
|- Gold price remains sidelined around multi-day top, stays firmer past $1,950 confluence level.
- Fewer technical hurdles, expected hawkish outcomes from ECB keep XAU/USD buyers hopeful.
- US second-tier data, risk catalysts may entertain Gold traders ahead of NFP.
Gold price (XAU/USD) grinds near the highest levels since April 2022, making rounds to $1,952-50 during early Thursday. In doing so, the XAU/USD bulls seem to catch a breather after rising the most in a fortnight as markets brace for a few more central banks and the US jobs report.
That said, the Gold price rallied heavily the previous day after the US Federal Reserve (Fed) drowned the US Dollar with its dovish hike of 0.25%, which was widely expected and priced in. The major attention, however, was given to the Fed statement suggesting the receding inflation pressure and Chairman Jerome Powell’s hints of rate cuts during late 2023 if inflation drops faster. Additionally favoring the XAU/USD bulls were downbeat US data and hopes of more stimulus from China, not to forget upbeat equities and softer US Treasury bond yields.
Moving on, monetary policy meetings of the European Central Bank (ECB) and the Bank of England (BoE) could indirectly affect the Gold price via the US dollar and the market sentiment. Though, Friday’s US jobs report for January will be crucial for a clear guide.
Gold Price: Key levels to watch
The Technical Confluence Detector shows that the Gold price grinds higher past the all-important $1,950 support confluence, comprising previous monthly and weekly highs, not to forget the lower band of Bollinger on 15 minutes.
Even if the Gold price slip beneath the key support, a convergence of the Fibonacci 38.2% on one-day and 23.6% on one-week could challenge the metal’s further downside near $1,940.
Following that, 38.2% on one-week, the middle band of the Bollinger on the hourly play and SMA 5 on four-hour (4H) could together restrict Gold price declines near $1,935.
Alternatively, Pivot Point one-month R1 near $1,978 appears the key hurdle for the Gold buyers to poke as they defend positions beyond $1,950.
Ahead of that, Pivot point one-week R2 could challenge the XAU/USD bulls near $1,968. It’s worth noting that the late March 2022 high near $1,966 appears the immediate hurdle for Gold traders to watch.
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About Technical Confluences Detector
The TCD (Technical Confluences Detector) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.
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