Gold Price Forecast: XAU/USD extends Fed inspired bounce off $1,960 on softer yields – Confluence Detector

Gold price (XAU/USD) eyes another battle with the $2,000 mark by extending the Federal Reserve (Fed) induced gains amid downbeat US Treasury bond yields and the US Dollar. It’s worth noting that the receding fears of the banking turmoil, despite US Treasury Secretary Janet Yellen’s rejection of “blanket insurance” for deposits, also seem to propel the XAU/USD prices of late.

That said, the Fed delivered 25 basis points (bps) of a rate hike but the Rate Statement and dot-plot raised concerns of dovish moves in the future, which in turn drowned the US Dollar even if Fed Chair Powell ruled out calls for a rate cut in 2023. Elsewhere, US stock futures print mild gains and Asia-Pacific equities also grind higher as China-linked optimism joins downbeat yields.

Looking forward, second-tier statistics and monetary policy moves of the Bank of England (BoE), as well as the Swiss National Bank (SNB), may entertain Gold traders as bulls expect more dovish rate hikes amid the looming banking crisis.

Also read: Gold Price Forecast: XAU/USD set to retake $2,000 on dovish Federal Reserve outlook

Gold Price: Key levels to watch

As per our Technical Confluence Detector, Gold price trades successfully beyond the $1,962 support confluence comprising Fibonacci 38.2% on one-day and 100-HMA.

Also acting as the short-term key support is the $1,960 mark that encompasses the 5-DMA, previous monthly high and Fibonacci 23.6% on one-week.

Should the quote drops below $1,960, the odds of its fall towards the latest swing low surrounding $1,930 can’t be ruled out.

Meanwhile, the previous weekly high and upper band of Bollinger on hourly play highlights $1,992 as an immediate upside hurdle.

Following that, the $2,000 psychological magnet and upper band of Bollinger on four-hour play, close to $2,002, may act as an extra filter towards the north.

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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.