Falling yields have always been good for gold – and this time, the precious metal seems to have found its feet regardless of the Treausiries. Tuesday’s slide in returns on 10-year bonds sent XAU/USD shooting higher, and it stayed there also after yields crept up once again.
One of the explanations for the recent rise is the hint from the Fed that the pace of bond-buying will be reduced only gradually – 15 billion fewer dollars worth of buys every month rather than $20 billion.
How is XAU/USD technically positioned?
The Technical Confluences Detector is showing that gold faces some resistance at $1,80`, which is the convergence of the 100-day Simple Moving Average, the Bollinger Band 15min-Upper, and the previous 4h-high.
The more significant line is $1,820, which is where the Pivot Point one-month Resistance 1 and the PP one-day R2 meet up.
Immediate support awaits at $1,797, which is the confluence of the 200-day SMA and the PP one-week Resistance 2.
The next line to watch is $1,791, which is a juncture of indicators including the Fibonacci 61.8% one-month and the SMA 100-15m.
Lower, strong support awaits at $1,777, which is where the PP one-week, the 50-day SMA, and the SMA 50-1h all converge.
XAU/USD resistance and support levels
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.