• A combination of factors dragged Gold below the $1,800, back closer to the YTD low on Friday.
  • Aggressive Fed rate hike bets, broad-based USD strength exerted heavy downward pressure.
  • Recession fears did little to impress bulls or lend any support to the safe-haven commodity.

The prospects for a more aggressive policy tightening by major central banks to curb soaring inflation continued taking its toll on the non-yielding gold. Apart from this, the underlying bullish tone around the US dollar was seen as another factor that weighed heavily on the dollar-denominated commodity. Spot prices broke through the $1,800 psychological mark and tumbled back closer to the YTD low during the early North American session. Meanwhile, growing worries about a possible global recession did little to impress bullish traders or lend any support to the safe-haven XAUUSD. This, in turn, suggest that the path of least resistance for the precious metal is to the downside.

Gold Price: Key levels to watch

The Technical Confluence Detector shows that Gold Price could find decent support near the YTD low, around the $1,780 region. The said area coincides with Pivot Point one month S1 and is closely followed by Pivot Point one day S3. A convincing break below the latter would be seen as a fresh trigger for bearish traders and pave the way for an extension of the ongoing downward trajectory.

On the flip side, the $1,790 region - the convergence of Pivot Point one day S2 and Bollinger Band one-hour Lower and SMA - now seems to act as immediate resistance. Sustained strength beyond might trigger a short-covering bounce and lift Gold Price back towards the $1,798-$1,800 area. The said hurdle comprises Pivot Point one week S2, Pivot Point one day S1 and 5-period SMA 4-hour.

fxsoriginal

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.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

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