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Gold is holding up above $1900, looking to extend gains into the third straight day on Wednesday, despite the recent broad US dollar strength. Risk-aversion remains in play amid likely imposition of tighter COVID-19 restrictions in Europe’s top economies, as the second-wave tightens its grip.

Also, benefiting the yieldless gold is the sell-off in the US Treasury yields across the curve amid faltering US economic recovery and election anxiety. Fading prospects of US fiscal stimulus also weighs on the investors’ sentiment.

How is gold positioned technically?

Gold: Key resistances and supports

The Technical Confluences Indicator shows that the yellow metal is trying hard to overcome powerful resistance at $1909.40, which is the convergence of the SMA200 four-hour and Fibonacci 61.8% one-week.

Acceptance above the latter will revive the bullish momentum, with the next major resistance seen at $1919, where the Fibonacci 38.2% one-week is placed.

Further north, the bulls will test the $1923 barrier, the intersection of the pivot point one-week R1 and Fibonacci 23.6% one-week. The previous week high of $1932 will be back on the buyers’ radars.

Alternatively, an immediate cushion is set at $1906, which is the meeting point of the Fibonacci 38.2% one-day, SMA100 four-hour and SMA10 one-day.

A firm break below the last could call for a test of the next support at $1902, the previous low on four-hour and Fibonacci 61.8% one-day convergence.

Selling pressure is likely to intensify below the latter, opening floors towards the next downside target of $1887, which is the confluence of the pivot point one-week S1 and pivot point one-day S3.

Here is how it looks on the tool


About Confluence Detector

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.

Learn more about Technical Confluence