Gold Price Forecast: XAU/USD bears concentrate on $1,925 break and Fed Chair Powell – Confluence Detector
- Gold Price drops for the fourth consecutive day as bears cheer downside break of key support confluence.
- China-inflicted risk aversion joins hawkish Fed talks and upbeat US data to weigh on XAU/USD price.
- Fed Chair Jerome Powell’s ability to defend the hawkish halt will be eyed by the Gold sellers to keep the reins.
Gold Price (XAU/USD) remains on the back foot as bears prod $1,930 support confluence with eyes on Fed Chair Jerome Powell’s bi-annual testimony. In doing so, the XAU/USD drops for the fourth consecutive day amid a firmer US Dollar and sour sentiment, mainly led by China.
That said, the US Dollar Index (DXY) stays defensive around 102.60 while keeping the four-day uptrend without marking keen interest to move toward the north. Even so, the geopolitical fears surrounding the US and China weigh on the sentiment and put a floor under the US Dollar’s haven demand. Also underpinning the US Dollar’s run-up, as well as weighing on the Gold price are the upbeat US housing numbers and hawkish Fed signals published the previous day.
Apart from that fears that China’s inability to mark upbeat growth can endanger the Gold demand from one of the world’s biggest XAU/USD consumers also weigh on the precious metal prices. Late on Tuesday, The Straits Times marked the second consecutive monthly easing on China’s Gold demand.
Looking forward, a light calendar ahead of Fed Chair Jerome Powell’s bi-annual testimony may test the Gold sellers but the buyers are less likely to return to the table.
Also read: Gold Price Forecast: XAU/USD keeps sight on $1,918 and Fed Chair Powell’s testimony
Gold Price: Key levels to watch
As per our Technical Confluence Indicator, the Gold Price has already breached the two short-term key supports around $1,936 and $1,931 respectively. However, the $1,930 round figure and the previous bottom of around $1,925 prods the XAU/USD bears on an important day.
That said, the Gold Price presently seesaws around $1,930 support confluence comprising Pivot Point one-week S1.
Following that, the Pivot Point one-day S1 will act as the final defense of the XAU/USD bulls around $1,925, a break of which could drag the Gold bears toward the $1,900 round figure.
Meanwhile, the previous monthly low of around $1,931 prods the Gold buyers ahead of the Fibonacci 23.6% on the daily and weekly chart, around $1,936.
It’s worth noting that the Gold Price run-up beyond $1,936 will need to stay firmer past the $1,945 hurdle comprising the Fibonacci 38.2% on the weekly chart to push back the bearish bias.
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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. If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
