Gold Price Analysis: XAU/USD’s recovery stalls below key $1715 barrier amid surging yields – Confluence Detector

Gold (XAU/USD) is consolidating its recovery above $1700, having hit nine-month lows at $1687 on Friday. US Senate passed the $1.9 trillion stimulus bill on Saturday, which helped power the recovery in gold. However, the surge in the US Treasury yields amid reflation trade, check the recovery in the yellow metal.

Despite the US stimulus progress, markets remain unnerved amid fears of overheating, as reflected by the ongoing rise in the yields. Therefore, the haven demand for the US dollar persists, likely limiting gold’s upside attempts. The greenback also benefits from a stellar NFP report. The focus will continue to remain on the Treasury yields amid a quiet start to the week, calendar-wise.

How is gold positioned on the charts?

Gold Price Chart: Key resistance and support levels

The Technical Confluences Detector shows that gold has turned south once again, with the immediate support seen around $1700, the confluence of the SMA10 four-hour and Fibonacci 38.2% one-day.

The next downside target is placed at $1687; the convergence of the multi-month lows and pivot point one-day S1.

Further south, the intersection of the pivot point one-day S2 and Fibonacci 161.8% one-day at $1677 needs to be cracked, in order to test the June 2020 low at $1670.

Alternatively, the $1709 barrier could be challenged once again if the buying interest returns. That level is the confluence of the previous day high and pivot point one-day R1.

The Fibonacci 38.2% one-week at $1715 is a tough nut to crack for the XAU bulls. The next significant barrier awaits around $1718/20, which is the meeting point of the previous month low and pivot point one-day R2.

A firm break above the latter is needed to revive the recovery momentum towards $1730, the Fibonacci 61.8% one-week.

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.