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Gold breached the critical $1775 support starting out a fresh week and refreshed four-month lows below $1770, as last week’s sell-off resumed. The yellow metal remains on track to book the worst month in four years after yielding a weekly close below $1800 for the first time since mid-July.

The risk rally in the global stocks amid coronavirus vaccine-led expectations of a faster economic turnaround weighs on gold’s safe-haven appeal. Further, month-end flows combined with reduced need for more stimulus also adds to the vulnerability in gold.

How is gold positioned on the charts heading into the NFP week?

Gold: Key resistances and supports

The Technical Confluences Indicator shows that the XAU/USD pair remains exposed to further downside risks amid a lack of healthy support levels.

The four-month lows of $1765 will challenge the bears’ commitment once again, opening floors for a test of the Pivot Point one-day S2 at $1752.50.

The next critical cushion is seen at $1750, which is the Pivot Point one-week S1.

Alternatively, recapturing the strong $1775 resistance is critical to reviving the recovery momentum. That level is the intersection of the SMA10 15-minutes, Pivot Point one-month S3 and Friday’s low.

Further up, the XAU bulls could face stiff resistance at $1783, where the Fibonacci 23.6% one-day coincides with the Bollinger Band one-day Lower.

The Fibonacci 38.2% one-day at $1790 could guard the further upside ahead of the SMA5 four-hour barrier aligned at $1787.

Here is how it looks on the tool


About Confluence Detector

The TCI (Technical Confluences Indicator) 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.

Learn more about Technical Confluence