Gold Price Forecast: XAU/USD surrenders intraday lows, turns lower below $1,750 level

Update: Gold struggled to capitalize on its modest intraday gains on Thursday, instead met with some fresh supply near the $1,785 region. The XAU/USD extended its descent through the early North American session and dropped to fresh daily lows, around the $1,744 area in the last hour. The commodity has now eroded a part of the previous day's positive move that followed the US CPI report, which eased fears about an early withdrawal of the stimulus by the Fed.

However, the Fed officials have started to guide the market towards early tapering and higher interest rates as soon as 2022. This, in turn, acted as a tailwind for the US Treasury bond yields and kept a lid on any meaningful gains for the non-yielding yellow gold. A modest uptick in the US Treasury bond yields, along with upbeat US macro data extended some support to the US dollar. This was seen as another factor that undermined the dollar-denominated commodity.

That said, uncertainty over the likely timing for policy tightening by the Fed held traders from placing aggressive bets directional bets and helped limit the downside for gold. Hence, it will be prudent to wait for some follow-through selling before confirming that this week's goodish rebound from the flash crash to the lowest level since March has lost steam.

Previous update: Gold price is holding the higher ground above $1750, looking to build onto its recovery from five-month lows, as the US dollar nurses losses amid fading hawkish Fed expectations and weaker Treasury yields. The US July CPI report showed signs of inflation peaking, cooling expectations of an imminent Fed’s tapering. Meanwhile, concerns over the economic impact of the spread of the Delta covid variant globally also underpin gold’s safe-haven appeal. Looking ahead, all eyes remain on the US PPI and Jobless Claims data to sustain the recovery momentum above the $1750 psychological level.

Read: Gold Price Forecast: Bulls have the upper hand above $1,750 level

Gold Price: Key levels to watch

The Technical Confluences Detector shows that gold has eased from a critical barrier at $1759, which is the intersection of the previous week’s low and the previous high four hour.

Acceptance above the latter is critical to unleashing further recovery gains towards $1763, the pivot point one-day R1.

The next powerful resistance is aligned at $1766, the previous month’s low. A sustained move above that level could trigger a rally towards $1775.

At that point, the Fibonacci 23.6% one-week, pivot point one-month S1 and SMA50 four-hour meet.

On the downside, the $1752 demand zone offers immediate support, where the SMA5 four-hour, previous low four-hour and Bollinger Band one-hour Middle converge.

The Fibonacci 23.6% one-day at $1747 could emerge as the next relevant support. Further south, $1743 will be the level to beat for the bears.

That level is the confluence of the Fibonacci 38.2% one-day and SMA10 four-hour.

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.  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.