- XAU/USD has been unable to hold onto its as Treasury yields bounced back.
- The Confluence Detector shows that gold has significant support at $1,878.
- Gold prices pull back as traders book profits – What's next? [Video]
Ignoring inflation has its limits – after markets shrugged off the increase in US Consumer Price Index (CPI) to 5%, they have been having a rethink. The initial drop in Treasury yields perplexed many and delighted gold bulls. Lower returns on safe government debt make the precious metal more attractive.
However, as tensions toward Wednesday's Federal Reserve meeting are mounting, caution has returned and XAU/USD is on the retreat.
How is gold positioned on the technical charts?
The Technical Confluences Detector is showing that XAU/USD has robust support at $1,878, which is the convergence of the Fibonacci 38.2% one-week, the Bollinger Band four-hour lower, the Fibonacci 23.6% one-month and the Pivot Point one-day Support 1.
Further down, another cushion awaits at $1,871, which is where the Fibonacci 23.6% one-week and the previous daily low meet up.
Some resistance is at $1,888, which is the confluence of the BB 1h-Lower, the Fibonacci 38.2% one-day, and the BB one-day Middle.
It is followed by $1,894, which is a juncture including the Fibonacci 23.6% one-day and the Fibonacci 61.8% one week.
XAU/USD resistance and support levels
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.
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