Gold Price Analysis: XAU/USD bears eye a decisive break below $1871 – Confluence Detector


Gold (XAU/USD) licks wounds after hitting fresh monthly lows below $1870 on Wednesday. The yellow metal fell amid resurgent haven demand for the US dollar, as partial lockdowns implemented in Germany and France threatened to derail the global economic recovery.

“Sell everything mode” returned to markets amid renewed coronavirus fears, as gold tumbled alongside stocks. The metal closed below the critical 100-DMA support of $1887 on a daily basis for the first time since March. Let’s take a look at the charts to see if gold will resume its downtrend.

Gold: Key resistances and supports

The Technical Confluences Indicator shows that the yellow metal is flirting with the $1884 barrier, which is the confluence of the SMA5 four-hour and Fibonacci 23.6% one-month.

The next upside cap appears at $1887, where the pivot point one-week S1 coincides with SMA100 one-day.  

Further up, the intersection of the previous week low and SMA10 four-hour at $1895 will offer some resistance.

Acceptance above $1904 is critical to ease off the bearish pressure in the near-term. That level is the powerful confluence of Fibonacci 38.2% one-month and SMA10 one-day.

On the flip side, a sustained move below $1871 cushion, the convergence of the pivot point one-week S2 and Fibonacci 161.8% one-week), will open floors for a test of $1860 (pivot point one-day S1).

Here is how it looks on the tool

fxsoriginal

About 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.

Learn more about Technical Confluence

 

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD: Further gains need to clear 0.6375

AUD/USD: Further gains need to clear 0.6375

AUD/USD navigated an irresolute day on Wednesday, hovering around the 0.6350 zone on the back of further gains in the US Dollar and amid some prudence ahead of the release of the Australian jobs report on Thursday.

AUD/USD News
EUR/USD: Initial contention lies at 1.0400

EUR/USD: Initial contention lies at 1.0400

EUR/USD kept its bearish trend well in place for the third consecutive day on Wednesday, slipping back to the 1.0400 zone in response to further improvement in the Greenback.

EUR/USD News
Gold retreats, holds firmly above $2,920

Gold retreats, holds firmly above $2,920

Prices of Gold now face increasing selling pressure and recedes to the area of daily lows near the $2,930 level per ounce troy in response to the strong bounce in the Greenback, and mixed US yields.

Gold News
Dogecoin price targets $0.50 as Elon Musk enters $44 billion investment talks for X

Dogecoin price targets $0.50 as Elon Musk enters $44 billion investment talks for X

Dogecoin price gained 0.30% on Wednesday, getting close to the $0.26 resistance after four consecutive days of losses. News reports show the DOGE markets were lifted by fresh investment talks involving Elon Musk’s social media company X. 

Read more
Money market outlook 2025: Trends and dynamics in the Eurozone, US, and UK

Money market outlook 2025: Trends and dynamics in the Eurozone, US, and UK

We delve into the world of money market funds. Distinct dynamics are at play in the US, eurozone, and UK. In the US, repo rates are more attractive, and bills are expected to appreciate. It's also worth noting that the Fed might cut rates more than anticipated, similar to the UK. In the eurozone, unsecured rates remain elevated.

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025