- Gold price licks its wounds around below $1,800 as the US Dollar holds firm.
- Robust US economic data revive hawkish Federal Reserve tightening bets.
- Downside appears more compelling for Gold price after rejection above $1,800.
Gold price is consolidating a two-day downtrend below the $1,800 threshold, as bears gather strength before initiating a fresh leg lower. A quiet calendar is also contributing to the listless performance of Gold price. Meanwhile, investors turn cautious and help underpin the safe-haven demand for the US Dollar, in turn, capping the recovery attempts in the bright metal. The US Dollar continues to capitalize on the recent strong US ISM Services PMI and Factory Orders data, which have renewed expectations of more rate increases from the Federal Reserve (Fed), extending into the next year. However, stalled upside in the US Treasury yields across the curve is allowing Gold price stage a modest comeback. Amid a lack of top-tier US economic data and the Fed’s ‘blackout period’, the broad market sentiment and the Fed rate hike expectations will continue to play a pivotal role in influencing the USD-denominated Gold price.
Also read: Gold Price Forecast: XAU/USD risks further downside on renewed hawkish Federal Reserve view
Gold Price: Key levels to watch
The Technical Confluence Detector shows that the gold price is eyeing a big break to the downside, targeting the initial support at the SMA50 four-hour at $1,768.
The next strong cushion is seen at around $1,765, the convergence of the Fibonacci 61.8% one-week, the previous day’s low and the SMA100 four-hour.
A sharp drop toward the pivot point one-week S1 at $1,758 cannot be ruled out if the abovementioned support fails to hold.
Alternatively, Gold buyers need to find a strong foothold above the confluence of the Fibonacci 23.6% one-day and SMA5 one-day at $1,777.
Further upside will open beyond a break of the Fibonacci 38.2% one-week at $1,781. The next stop for bulls is envisioned at the intersection of the Fibonacci 38.2% one-day and SMA100 one-hour at around $1,783.
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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.
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