Gold quickly retraced $20 from fresh all-time highs of $2031.20, as investors took profits off the table after the relentless rise. Despite the pullbacks, the path of least resistance is to the upside amid persistent downbeat tone seen around the US dollar.
Update: Gold has hit a new peak of $2,044.64 before consolidating around $2,040 at the time of writing. It seems that the precious metal is gaining more traction amid elevated media coverage and as talks between Democrats and Republicans make progress. July's Non-Farm Payrolls are approaching and signs are far from being positive. Some are already eyeing higher levels, see: Gold: Temporary pullback before moving to $2100 – TDS
The greenback remains undermined by falling US inflation-adjusted/ real Treasury yields, which sit at record lows amid worries over the US economic recovery. Meanwhile, low yields make the non-yielding gold more attractive.
Next of relevance for the metal remains the US ADP jobs report, with ‘buy the dips’ play expected, as suggested by the Confluence Detector tool.
Key XAU/USD resistances and supports
The tool shows that the bright metal could find fresh bids at $2008 following a quick retracement from record highs. The convergence of the pivot point one-week R1 and Fibonacci 23.6% one-day makeup for strong support. Bargain-buyers could look for entry around that level.
On a failure to hold above that critical support, the bears will then target the next cushion around $2003/2001, which is the Fibonacci 38.2% one-day.
Further south, minor support at $1998, the intersection of SMA5 four-hour and Bollinger Band one-hour Middle could come into play.
On the flip side, immediate resistance is seen at $2020, which is the confluence of the previous day high, Bollinger Band 15-minutes Middle and SMA5 one-hour.
The next upside target awaits at $2029, the Bollinger Band one-day Upper. Acceptance above that level could open doors for a retest of the life-time highs.
Powerful resistance at $2037, where the Bollinger Band one-hour Upper and pivot point one-week R2 meet, will be a tough nut to crack for the XAU bulls.
Here is how it looks on the tool
About the Confluence Detector
The Confluence Detector finds exciting opportunities using Technical Confluences. The TC 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. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.
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.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds on to intraday gains after upbeat US data
EUR/USD remains in positive ground on Friday, as profit-taking hit the US Dollar ahead of the weekend. Still, Powell's hawkish shift and upbeat United States data keeps the Greenback on the bullish path.
GBP/USD pressured near weekly lows
GBP/USD failed to retain UK data-inspired gains and trades near its weekly low of 1.2629 heading into the weekend. The US Dollar resumes its advance after correcting extreme overbought conditions against major rivals.
Gold stabilizes after bouncing off 100-day moving average
Gold trades little changed on Friday, holding steady in the $2,560s after making a slight recovery from the two-month lows reached on the previous day. A stronger US Dollar continues to put pressure on Gold since it is mainly priced and traded in the US currency.
Bitcoin to 100k or pullback to 78k?
Bitcoin and Ethereum showed a modest recovery on Friday following Thursday's downturn, yet momentum indicators suggest continuing the decline as signs of bull exhaustion emerge. Ripple is approaching a key resistance level, with a potential rejection likely leading to a decline ahead.
Week ahead: Preliminary November PMIs to catch the market’s attention
With the dust from the US elections slowly settling down, the week is about to reach its end and we have a look at what next week’s calendar has in store for the markets. On the monetary front, a number of policymakers from various central banks are scheduled to speak.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.