Gold Price Forecast: XAU/USD to remain choppy below $1,800 ahead of US inflation – Confluence Detector
|- Gold price returns to the red on Thursday amid sell-on-rallies trading.
- US Treasury yields trade firmer above 1.50%, lifting the dollar’s demand.
- Gold sellers eye $1,750 as Fed stays on tightening path.
Gold price is correcting from weekly tops, as global stocks and Treasury yields rebound on easing Omicron fears. Further, hopes that the Fed will likely accelerate the reduction in bond-buying next week add to the pullback in gold price. However, expectations of hot US inflation and rising Chinese Consumer Price Index (CPI) could likely limit the decline in gold price. Markets also remain cautious ahead of Thursday’s Treasury note auction and incoming Omicron updates worldwide.
Read: Gold Price Forecast: Sellers happily adding on spikes amid a lack of clear direction
Gold Price: Key levels to watch
The Technical Confluences Detector shows that the gold price is heading towards powerful support at $1,780, where the previous day’s low, pivot point one-day S1 and Fibonacci 38.2% one-week converge.
A sustained move below the latter could trigger a drop towards $1,773-$1,772, the intersection of the Fibonacci 23.6% one-week, pivot point one-day S2 and the Fibonacci 161.8% one-day.
The further downside could challenge the bullish commitments at the pivot point one-day S3 at $1,766, below which floors will open up towards the previous week’s low of $1,762.
On the flip side, gold bulls need to break through a dense cluster of healthy resistance levels around $1,786. That price zone is the confluence of the Fibonacci 23.6% one-month, Fibonacci 61.8% one-day and SMA10 four-hour.
The next relevant upside barrier is seen at $1,792, the meeting point of the Fibonacci 61.8% one-week, SMAs 100 and 200 one-day.
The SMA50 one-day at $1,796 will then challenge the bullish attempts, above which a rally towards $1,800 cannot be ruled out. That is the pivot point one-day R2.
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.
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.