Gold is holding up above $1900, looking to extend gains into the third straight day on Wednesday, despite the recent broad US dollar strength. Risk-aversion remains in play amid likely imposition of tighter COVID-19 restrictions in Europe’s top economies, as the second-wave tightens its grip.
Also, benefiting the yieldless gold is the sell-off in the US Treasury yields across the curve amid faltering US economic recovery and election anxiety. Fading prospects of US fiscal stimulus also weighs on the investors’ sentiment.
How is gold positioned technically?
Gold: Key resistances and supports
The Technical Confluences Indicator shows that the yellow metal is trying hard to overcome powerful resistance at $1909.40, which is the convergence of the SMA200 four-hour and Fibonacci 61.8% one-week.
Acceptance above the latter will revive the bullish momentum, with the next major resistance seen at $1919, where the Fibonacci 38.2% one-week is placed.
Further north, the bulls will test the $1923 barrier, the intersection of the pivot point one-week R1 and Fibonacci 23.6% one-week. The previous week high of $1932 will be back on the buyers’ radars.
Alternatively, an immediate cushion is set at $1906, which is the meeting point of the Fibonacci 38.2% one-day, SMA100 four-hour and SMA10 one-day.
A firm break below the last could call for a test of the next support at $1902, the previous low on four-hour and Fibonacci 61.8% one-day convergence.
Selling pressure is likely to intensify below the latter, opening floors towards the next downside target of $1887, which is the confluence of the pivot point one-week S1 and pivot point one-day S3.
Here is how it looks on the tool
About 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 stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.