Gold Price Forecast: XAU/USD edges lower past $1,955 hurdle on firmer US Dollar – Confluence Detector

Gold Price (XAU/USD) remains depressed for the second consecutive day as markets turn slightly downbeat ahead of this week’s top-tier data/events. Also exerting downside pressure on XAU/USD could be the fears emanating from China, one of the biggest Gold customers. In doing so, the bright metal also bears the burden of the upbeat US Dollar.

That said, the US Dollar Index (DXY) manages to defend the week-start rebound above 102.00, close to 102.30 by the press time, even as the Federal Reserve (Fed) officials struggle to convince hawks. On Monday, Fed Governor Michelle Bowman and New York Fed President John C. Williams flashed mixed signals as the former cited the need for more interest rate hikes while Fed’s William showed indecision about the inflation conditions and prod the hawks.

Not only from the Fed policymakers but the monetary policy signals from the Bank of England (BoE), the Bank of Japan (BoJ) and the European Central Bank (ECB) also came in mixed and favored the market’s rush towards the US Dollar and indirectly weighing on the Gold Price.

Elsewhere, China’s warning about using the face recognition system joins the latest Japan-China tension and the Sino-US tussles to weigh on the sentiment amid a light calendar and lackluster yields. Also, the recent foreign trade numbers from Beijing haven’t been impressive despite marking a strong Trade Balance.

Moving on, the risk catalysts and the second-tier US data will entertain the XAU/USD traders ahead of the key Thursday when the top-tier US inflation clues will be released.

Also read: Gold Price Forecast: XAU/USD downside remains compelling whilst below 50 DMA

Gold Price: Key levels to watch

Our Technical Confluence indicator shows that the Gold Price remains well beneath the key resistance surrounding $1,955, comprising Fibonacci 61.8% on one-week, 161.8% on one-day and the middle band of the Bollinger on one-day.

It’s worth noting that the Fibonacci 23.6% on one-day and 61.8% on one-month together restricts the immediate upside of the Gold price near $1,936.

Adding to the upside filters is the convergence of the previous daily high and 50-SMA on four-hour (4H), near $1,950.

It should be observed that the Gold Price run-up beyond $1,955 enables the bulls to challenge the $1,985 resistance area comprising multiple tops marked since May.

Alternatively, the previous daily low joins the lower band of the Bollinger on the Daily chart to highlight $1,915 as the short-term key support ahead of the $1,900 threshold.

Ahead of that, the previous weekly low of around $1,926 may test the XAU/USD sellers.

Overall, the Gold Price remains on the way to testing $1,915 unless staying beneath the $1,955 key resistance.

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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.