Gold Price Analysis: Path of least resistance is up, $1,626 next target – Confluence Detector

Gold prices have surpassed the January high – triggered by the Iranian crisis – and have reached the highest since 2013. The coronavirus scare is among the upside drivers. 

The Technical Confluences Indicator is showing that support lines are stronger than resistance, implying that the rally still has room to run. 

XAU/USD is benefiting from two substantial clusters of support. The first is at $1,613 – above the January low – and it consists of the previous daily high and the Pivot Point one-week Resistance 3. 

The next defensive barrier is at $1,611, which is the convergence of the Simple Moving Average 50-15m, the SMA 10-1h, and the January high. 

Looking up, weak resistance awaits Gold at $1,617, which is the confluence of the Bollinger Band one-hour Upper, the SMA 5-15m, the SMA 10-15m, and the Pivot Point one-day Resistance 1. 

The upside target is $1,626 where XAU/USD faces fiercer resistance – the long-term Pivot Point one-month Resistance 1 awaits it there. 

Overall, the precious metal's price has significant cushions and few junctures of resistance lines, allowing for more rises.

Here is how it looks on the tool:

Gold confluence technical February 20 2020

Confluence Detector

The Confluence Detector finds exciting opportunities using Technical Confluences. The TC 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. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.

This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. These weightings mean that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas.

Learn more about Technical Confluence

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Editors’ Picks

USD/JPY seesaws around 107.00 amid coronavirus-led risk-off

USD/JPY remains on the back foot amid the early Thursday morning in Asia. The Japanese yen benefits from its safe-haven allure while being the only major to gain versus the US dollar during the current tough time.


AUD/USD remains under pressure below 0.6100 as markets stay defensive

AUD/USD fails to cheer better than forecast activity numbers from home and China. Globally rising coronavirus cases, extended lockdowns in Europe and grim words from key policymakers favor risk-off. 


Gold building a bullish case as COVID-19 reigns

The gold price has lost some bullish support of late as the US dollar moves higher, ending the last quarter on the front foot as a relatively illiquid market sees exaggerated moves adding to the upside support. 

Gold News

WTI pierces $21.00 as US fuels hopes of supply disturbance/control

While extending its recovery moves from the previous day, WTI clears the $21.00 mark, with a high of $21.20, while taking rounds to $21.10 during Thursday’s Asian session. The US leader expects Russia-Saudi Arabia “to work it out.”

Oil News

Dollar Shrugs Off ISM & ADP in Fear of Ugly Jobless Claims

If the first day of April is a taste of what's to come, it will be a very rocky second quarter. After falling more than 24% between January and March, the Dow Jones Industrial Average plunged opened down more than -700 points. 

Read more