On Monday, the gold price continued its downward trend, which is now on its sixth consecutive day. The US dollar maintains its uptrend as investors become more risk averse in response to rising oil prices. The XAU/USD pair has to break below $1,730 for the downward trend to continue toward $1,720 and $1,714.
The price of gold is still subjected to significant selling pressure at the beginning of this week, which has carried over the negative trend from the previous week into a sixth consecutive trading day. Investors’ insatiable hunger for the US dollar as a haven-of-last-resort might be the primary driving force behind the recent drop in the price of the precious metal. After Russia’s Nord Stream 1 pipeline announced that it would be closing for maintenance at the end of this month, investors have been fleeing to safer investments in the face of hawkish expectations from the Federal Reserve and soaring energy prices in Europe and Asia.
As a result of increasing food and energy costs, the effort by global central banks to manage inflation is likely to go on for longer than expected. This dampens the desire for risk and weighs adversely on the non-interest-bearing yellow metal. Gold dealers don’t seem to be too concerned with the recent decline in rates on US Treasury securities, as they anticipate that the dollar will continue to be seen as the safer option going into the highly anticipated Jackson Hole Symposium hosted by the Kansas City Fed later this week.
Gold Price: Some Important Levels to Keep an Eye On
Suppose bears successfully break below the $1,730 barrier for an extended period. In that case, the Technical Confluence Detector indicates that the gold price will likely begin a new downward trend that will target the Bollinger Band one-day Lower at $1,720. This level represents the intersection of the one-day pivot point S3 and the one-week pivot point S1, respectively.
The subsequent essential support zone may be close to $1,714, corresponding to the Fibonacci 232.6% one-month level.
Should bears show signs of weariness, there is also the possibility that the metal may recover towards the one-day pivot point S2 at $1,737.
The one-day pivot point S1 will enter the picture at a higher price, now set at $1,743. The goal for the bulls will then be to reclaim the low point of the previous trading day, which was $1,746.
Near the price of $1,750, the intersection of the SMA200 four-hour and the Fibonacci 23.6% one-day lines is anticipated to serve as the last line of defense for sellers of Gold.
Concerning the Technical Confluences Detector
The Technical Confluences Detector, often known as TCD, is a tool that can find and point out those price levels where there is a congestion of technical indicators, such as moving averages, Fibonacci levels, Pivot Points, and so on. Find entry opportunities for counter-trend techniques and search for a few points at a time if you are a short-term trader. This will allow you to maximize your profits. This tool will inform you of the price levels where a medium-to-long-term trend may halt and rest, where to unwind holdings, or where to raise your position size. You will find this tool handy if you are a trader focusing on medium- to long-term investments.