Traders remain nervous as two starkly different narratives on the coronavirus continue to play out, keeping the sentiment around gold (XAU/USD) undermined. The risk sentiment seesaws amid the covid vaccine optimism and rapid rise in infections and new shutdowns in the US.
Meanwhile, if the risk aversion deepens amid resurfacing global economic concerns over the covid growth, the safe-haven US dollar is likely to draw bids and weigh negatively on gold.
Let's see if the charts also back gold’s bearish narrative?
Gold: Key resistances and supports
The Technical Confluences Indicator shows that the XAU/USD pair remains exposed to the additional downside amid a lack of health support levels.
Therefore, the next relevant cushion for the gold bulls is seen at $1860, the previous month low.
A failure to defend the latter could threaten the critical support at $1849, which is the convergence of the September low and pivot point one-month R1.
Alternatively, the bulls need a sustained break above the powerful $1878 barrier, in order to stage a temporary reversal. That level is the meeting point of the Fibonacci 61.8% one-day, Fibonacci 23.6% one-week and one-month.
Acceptance above the aforesaid critical resistance could see a brief advance towards the Fibonacci 38.2% one-month level at $1888.
Bulls will then challenge $1891, where the SMA10 one-day lies.
Here is how it looks on the tool
About Confluence Detector
The TCI (Technical Confluences Indicator) 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 below 1.0400 as mood sours
EUR/USD loses its traction and retreats to the 1.0380 area in the second half of the day on Monday. The negative shift seen in risk mood, as reflected by Wall Street's bearish opening, supports the US Dollar and makes it difficult for the pair to hold its ground.
GBP/USD nears 1.2500 on renewed USD strength
GBP/USD turns south and drops toward 1.2500 after reaching a 10-day-high above 1.2600 earlier in the day. In the absence of high-tier macroeconomic data releases, the US Dollar benefits from the souring risk mood and weighs on the pair.
Gold falls below $2,600 amid mounting risk aversion
Gold fell below the $2,600 level in the American session on Monday, with US Dollar demand backed by the poor performance of global equities and exacerbated by thin trading conditions ahead of New Year's Eve.
Three Fundamentals: Year-end flows, Jobless Claims and ISM Manufacturing PMI stand out Premium
Money managers may adjust their portfolios ahead of the year-end. Weekly US Jobless Claims serve as the first meaningful release in 2025. The ISM Manufacturing PMI provides an initial indication ahead of Nonfarm Payrolls.
Bitcoin misses Santa rally even as on-chain metrics show signs of price recovery
Bitcoin (BTC) price hovers around $97,000 on Friday, erasing most of the gains from earlier this week, as the largest cryptocurrency missed the so-called Santa Claus rally, the increase in prices prior to and immediately following Christmas Day.
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.