Gold Price Forecast: XAU/USD south-run appears more compelling – Confluence Detector
- Gold price keeps reversal from the key hurdle, drops back towards yearly low.
- Risk-aversion, hawkish central banks joined firmer yields to weigh on XAU/USD.
- US Q2 GDP eyed for intraday clues, recession, Russia and central banks are in focus.
- Bears can keep reins unless crossing $1,660 resistance confluence.
Gold price (XAU/USD) braces for the fresh yearly low, snapping a two-day uptrend, as the US dollar bulls return to the table after a brief absence the previous day. Fears of global recession and hawkish central bank actions are the major drivers that recently propelled the greenback. On the same line could be the upbeat US trade data and doubts over the Bank of England (BOE) and the People’s Bank of China (PBOC) to tame the economic slowdown woes. It’s worth noting that the chatters surrounding heavy rate hikes from the European Central Bank (ECB) joined the BOE’s surprise bond action to trigger the metal’s biggest daily jump in six months the previous day.
Given the sour sentiment and the XAU/USD pullback from the key hurdles, the bears are likely to keep the reins. However, a close watch over the aforementioned risk catalysts and the final readings of the US Q2 Gross Domestic Product (GDP) appears necessary for clear directions.
Also read: Gold Price Forecast: XAU/USD struggles to capitalize on corrective bounce amid rate-hike jitters
Gold Price: Key levels to watch
The Technical Confluence Detector shows that the gold price retreats from multiple strong resistances, suggesting a smooth run towards the south.
That said, a convergence of the previous weekly low and the SMA 100 on the hourly play, near $1,640, appears the immediate support to watch during the quote’s further weakness.
Following that, it can quickly decline towards the joint of the Pivot Point one week S1, close to $1,627.
During the XAU/USD downside past $1,627, the $1,600 appears the favorite among the gold bears.
Alternatively, $1,646 acts as the wall of resistance comprising Pivot Point one month S2, Fibonacci 38.2% on one day and 5-DMA.
If the metal prices cross the $1,646 hurdle, a run-up towards $1,653 can’t be ruled out. However, a convergence of 5-HMA, middle Bollinger on one-hour and Fibonacci 23.6% on one day and one week could challenge the buyers afterward.
It’s worth observing that the bullion’s run-up beyond $1,653 could aim for the last defense of bears, namely $1,660 that comprises the 10-DMA and Fibonacci 38.2% on one week.
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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.
