Gold (XAU/USD) has erased early gains and turns south on Tuesday, as the haven demand for the US dollar is back on the rise amid escalating American-Sino tensions. Strains between the world’s two biggest economies resurfaced over the South China Sea issue after a US carrier group entered the disputed waters last week.
Also, fading prospects of US President Biden’s $1.9 trillion stimulus plan likely to be passed by US Congress keep sentiment around gold undermined. Worsening risk-aversion ahead of the critical US Durable Good and Consumer Confidence data will keep any upside attempts in the metal elusive.
Let’s see how gold is positioned on the technical charts?
Gold Price Chart: Key resistances and supports
The Technical Confluences Indicator shows that gold has breached critical support at $1857, where the Fibonacci 38.2% one-month converged with the SMA50 one-hour.
The next relevant support awaits at $1851, the SMA10 one-day.
On a break below the latter, the price is likely to face a dense cluster of support levels around $1848, which is the intersection of the previous day low, SMA200 one-day and Fibonacci 38.2% one-week.
The bears could challenge the $1837 cushion, the pivot point one-day S2 if the selling pressure intensifies.
On the flip side, recapturing a powerful $1857 barrier is critical to extending the recovery towards $1863, the previous high four-hour.
Further north, the previous day high at $1867 could be back on the bulls’ radar.
The intersection of the previous week high and Fibonacci23.6% one-month around $1876 will be the level to beat for the XAU bears.
Here is how it looks on the tool
About Confluence Detector
The TCI (Technical Confluences Indicator) 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 edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.