Gold (XAU/USD) has kicked-off March on a positive footing, looking to recapture the $1750 level. Gold attempts recovery from eight-month lows of $1717, having booked the biggest monthly slump since late 2016 amid the rout in the global bonds. The bond tumbled amid a wild week and on rising inflation expectations, sending the returns on the markets through the roof. The non-yielding gold suffered the most.
The sentiment around the yellow metals is also underpinned by the passage of the US $1.9 trillion stimulus by the House of Representatives. In the week ahead, the focus will continue to remain on the yields, especially the US Treasury yields, and the all-important payrolls release.
Let’s take a look at how gold is positioned on the technical charts?
Gold Price Chart: Key levels of note
The Technical Confluences Indicator shows that gold’s recovery is likely to run into immediate resistance at $1753, the confluence of the Fibonacci 61.8% one-day, SMA10 four-hour and SMA100 15-minutes.
A break above which could challenge a powerful barrier at $1757, where the Fibonacci 23.6% one-month coincides with the Fibonacci 38.2% one-week.
The buyers would then target the pivot point one-day R1 at $1766 en-route the $1773 hurdle.
The intersection of the previous day high and Fibonacci 38.2% one-month at $1776 is the level to beat for the XAU bulls.
To the downside, an immediate cushion awaits at $1746, the Bollinger Band one-day Lower.
The sellers need to crack the $1740 cap in order to resume the recent downtrend. That level is the confluence of the Fibonacci 38.2% one-day, previous high four-hour and Fibonacci 23.6% one-week.
A sharp drop towards the multi-month lows of $1717 cannot be ruled if the bulls fail to defend the critical $1740 support.
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.
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