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.
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.