Having found strong support at $1700 on Friday, Gold (XAU/USD) is looking to extend the bounce this Monday amid fears about a potential rise in inflation, thanks to the massive US $1.9 trillion stimulus. However, the reflation trade-backed fresh lift in the US Treasury yields keeps the gains in check.
The benchmark 10-year rates on the US Treasuries are back above 1.60%, as we head into the FOMC week, with investors awaiting President Joe Biden’s COVID-149 rescue plan for fresh impetus. In the meantime, the focus will continue to remain on the Treasury yields.
How is gold positioned on the technical graphs?
Gold Price Chart: Key resistance and support levels
The Technical Confluences Detector shows that gold is looking to recapture the previous week high at $1740 amid a lack of healthy resistance levels.
Above that level, the XAU bulls would test the confluence of the Fibonacci 161.8% one-day and pivot point one-day R2 at $1747.
An immediate cap around $1751 could challenge the bullish commitment, where the pivot point one-week R1 is placed.
The next relevant barrier is seen at $1754, the Fibonacci 23.6% one-month.
To the downside, if the selling pressure resumes, gold could drop below the immediate cushion seen at $1723.50, which is the confluence of the Fibonacci 23.6% one-week, the previous low on four-hour and SMA10 one-hour.
The bears need to crack crucial support at $1720/$1717 to unleash the downside. That level is the meeting point of the Fibonacci 61.8% one-day, the previous month low and Fibonacci 38.2% one-week.
The convergence of the SMA10 and 5 one-day at $1713 would limit the losses. Sellers would then aim for the $1705 support, where the Fibonacci 23.6% one-day coincides with the pivot point one-day S1.
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. 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
Gold retreats from record highs at $3,220 ahead of US data
Gold price is retreating from fresh all-time highs of $3,220 in early Europe on Friday. The US Dollar downward spiral and escalating trade war between the United States and China continue to underpin the safe-haven appeal of Gold price. US PPI inflation data and tariff updates remain on tap.
EUR/USD consolidates weekly gains near 1.1250 ahead of Lagarde's speech
EUR/USD is consolidating the uptick to three-year highs of 1.1385 in Friday's European session. The pait stays supported amid easing US-EU trade tensions and broad US Dollar weakness. Tarff talks will be closely eyed alongside Lagarde's speech and US data.
GBP/USD holds gains near 1.3000 after UK data
GBP/USD is paring back gains to near 1.3000 in Friday’s early European session. The pair stays firm as the US Dollar loses ground amid lingering concerns over US economic growth and US-China trade war. Upbeat UK economic data fail to impress the Pound Sterling.
Bitcoin, Ethereum and Ripple show weakness while XRP stabilizes
Bitcoin and Ethereum prices are hovering around $80,000 and $1,500 on Friday after facing rejection from their respective key levels, indicating signs of weakness. Meanwhile, Ripple broke and found support around its critical level; maintenance suggests a recovery on the cards.
Trump’s tariff pause sparks rally – What comes next?
Markets staged a dramatic reversal Wednesday, led by a 12% surge in the Nasdaq and strong gains across major indices, following President Trump’s unexpected decision to pause tariff escalation for non-retaliating trade partners.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.