Gold snaps a two-day downtrend, bouncing off weekly low, while taking the bids near $1,733, up 0.37% intraday, ahead of Wednesday’s European session. In doing so, the yellow metal shrugs off US dollar gains and a strong risk-aversion wave.
A lack of clarity over the Fed’s future performance and economic recovery out of the coronavirus (COVID-19) gain major attention of the market bears. Also joining the league are geopolitical concerns surrounding China and vaccine jitters in Asia and Europe.
While portraying the mood, the US 10-year Treasury yields drop below 1.60% for the first time in a week whereas stock futures stay sluggish and the Asian shares remain heavy by the press time.
Looking forward, the yellow metal traders will keep their eyes on the risk catalysts and a heavy calendar comprising preliminary activity numbers for fresh impulse.
Read: S&P 500 Futures seesaw around 3,900 as US Treasury yields refresh one-week low
Gold: Key levels to watch
The Technical Confluences Indicator suggests the bears are tiring as the metal confronts a wall of resistance near $1,734-35 comprising 200-SMA on the 15-minutes (15M) formation, previous high on the four-hour (4H), upper Bollinger band on 15M and SMA 15 and 10 on hourly and 4H formation respectively.
Should the bulls manage to cross $1,735, upper Bollinger on the 1H and 38.2% Fibonacci retracement on the weekly (W1) formation around $1,742 will return to the chart.
However, any further upside will be tamed by 23.6% Fibonacci retracement on W1 and upper Bollinger band on 4H, around $1,747. Should gold buyers manage to cross $1,747, the 23.6% Fibonacci retracement on the monthly formation near $1,755 will be the key to watch.
Alternatively, the middle band of the Bollinger on the 1H, 38.2% Fibonacci retracement on the daily formation (D1) and the previous low on 15M restrict the metal’s immediate downside close to $1,732.
It should, however, be noted that the key support is $1,725, per Technical Confluence Indicator, which comprises first support of the weekly pivots and previous low on the D1 formation.
Overall, gold is confronting the upside hurdle even as bears are in a good position.
Here is how it looks on the tool
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. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.
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
Editors’ Picks
EUR/USD breaks below 1.1000 on stellar NFP
The buying bias in the Greenback gathers extra pace on Friday after the US economy created far more jobs than initially estimated in September, dragging EUR/USD to the area of new lows near 1.0950.
GBP/USD breaches 1.3100 after encouraging US Payrolls
The continuation of the uptrend in the US Dollar motivates GBP/USD to accelerates its losses and breaches 1.3100 the figure in the wake of the release of US NFP.
Gold rebounds from daily lows and flirts with $2,670
Following a post-NFP dip to the $2,640 region, Gold prices now embarks on an acceptable rebound and retest the area of $2,670 per ounce troy despite the marked advance in the US Dollar and rising US yields across the board.
US Payrolls surge in September, as 50bp rate cut ruled out
US payrolls data surprised on the upside in September, rising by 254k, smashing expectations of a 150k rise. The unemployment rate fell to 4.1% from 4.2%, average hourly earnings increased to a 4% YoY rate and there was a 72k upwards revision to the previous two months’ payrolls numbers.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.