Gold (XAU/USD) is attempting a tepid bounce after falling 1% on Thursday amid a sharp recovery staged by the US dollar. Risk-aversion gripped the markets on Bloomberg report that the Biden administration is proposing higher taxes on the wealthy to pay for its social plan. Flight to safety lifted the safe-haven greenback at the expense of stocks and gold. However, the losses in the yellow metal were limited by the sell-off in Treasury yields as well.
The focus now remains on the dynamics in the yields and the dollar for fresh trading impetus. In the meantime, let’s take a look at how gold is positioned on the technical charts?
Gold Price Chart: Key resistance and support levels
The Technical Confluences Detector shows that gold looks to recapture the Fibonacci 61.8% resistance at $1791.
A break above which would clear the path towards $1796, the pivot point one-day R1.
Further up, the XAU buyers need to find acceptance above $1800 to take on the further upside. That level is the confluence zone of the previous day high, pivot point one-week R and pivot point one-month R2.
Alternatively, gold is likely to find solid demand around $1786, where a cluster of minor support levels lies, which comprises of the previous high four-hour and Fibonacci 38.2% one-day.
The next support is seen at the previous week high of $1784, below which the convergence of the Fibonacci 23.6% one-day and SMA5 one-day at $1781 could get tested.
The Fibonacci 23.6% one-week at $1771 could be challenged if the previous day low of $1777 gives way.
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.