As the US Congress leaders make progress on talks over a $1 trillion covid aid package, markets eye an imminent stimulus deal, knocking off the US dollar further south. Expectations of additional funds are boosting the inflation-hedge Gold (XAU/USD), as it extends its break above the $1850 level.
The coronavirus vaccine optimism also collaborates with the dollar’s weakness, offering extra zest to the XAU bulls. However, it remains to be seen if the metal extends the upside heading into the FOMC showdown. Let’s take a look at how is gold positioned on the charts?
Gold Price Chart: Key resistances and supports
The Technical Confluences Indicator shows that the XAU/USD pair is looking to extend Tuesday’s rally towards the $1863 upside target, which is the Fibonacci 23.6% one-week.
On a break above the latter, the bulls are likely to challenge a strong cap at $1870, the Pivot Point one-week R1.
Acceptance above that level could prompt a fresh advance towards the $1876 barrier, which is the convergence of the previous week high and Pivot Point one-day R2.
On a break above the latter, the bulls could challenge the $1840 level, which is the confluence of the Pivot Point one-day R1 and SMA10 one-day.
Alternatively, if the bulls fail to defend immediate support at $1856, the previous day high, the price could be poised for a gradual decline amid several minor support levels stacked up to the downside.
The critical support at $1844 is expected to be a tough nut to crack for the bears.
The Fibonacci 38.2% one-month at $1841 could also offer some support before the price hits the concrete cushion at $1836, the Pivot Point one-day S1.
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 retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.