- The price of gold is rebounding from a six-day low, but buyers remain cautious.
- The bullish mood keeps the bearish Dollar in check despite a pause in selling yields.
- Central bank rate hike bets are cooling amid looming recession risks.
The R-word is back on radar, prompting markets to scale back aggressive rate hike expectations from major central banks around the world. Cooling hawkish expectations are helping to calm investors’ nerves, weighing negatively on the safe-haven US Dollar at the expense of the price of gold. However, the stabilization of US Treasury yields, following the recent retreat, prevents the shiny metal from continuing to rise. The market’s perception of risk sentiment amid persistent inflation and recessionary concerns will continue to drive the price action of the US Dollar, in turn influencing the XAUUSD. Attention now turns to next Monday’s US durable goods data and the ECB Forum in Sintra, where central bank leaders are likely to take part in a monetary policy roundtable.
Read also: Gold Price Prediction: XAUUSD Looks Ready To Test $1,800 After Symmetrical Triangle Breakout
Gold price: Main levels to watch
Technical Confluence Detector shows gold price pulling back after encountering strong offers at $1,831, which is the intersection of the 1-day Fibonacci 38.2%, the 1-hour SMA200 and the previous four hour summit.
The yellow metal is pulling back further towards the previous day’s low of $1,823, where the 23.6% one-week Fibonacci coincides.
A break of the latter will trigger a sharp decline for a test of the 23.6% Fibonacci 1-month confluence and S1 1-day pivot point at $1,816.
The one-day decline of the Bollinger Band at $1,812 will be the line in the sand for bulls in gold.
On the other hand, acceptance above the aforementioned resistance at $1,831 will challenge the powerful barrier at $1,835. At this level, the SMA5 one day, Fibonacci 38.2% one week, one month and one day converge.
The one-day 61.8% Fibonacci at $1,838 will test bearish commitments on further upside. A dense group of high resistance levels around $1,843 will be the level to beat for the XAU bulls. This level includes the one-day SMA200, the four-hour SMA100, and the one-day midpoint of the Bollinger Band.
This is what it looks like on the tool
About the Technical Confluence Detector
The TCD (Technical Confluences Detector) is a tool for locating and signaling price levels where there is congestion of indicators, moving averages, Fibonacci levels, pivot points, etc. If you are a short-term trader, you will find entry points for countertrend strategies and chasing a few points at a time. If you are a medium-long term trader, this tool will allow you to know in advance the price levels where a medium-long term trend can stop and rest, where to unwind positions, or where to increase your position size.