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Following the choppy action, XAU/USD closed last week with small losses a little above $1,730 as buyers failed to lift the yellow metal above key $1,745 resistance. According to FXStreet’s Eren Sengezer, a daily close below $1,720 could trigger a technical selloff.

Key quotes

“The Conference Board’s Consumer Confidence Index on Tuesday has the potential to affect the market’s risk perception. Until then, investors will keep a close eye on US T-bond yields. Strong resistance seems to have formed at 1.75% for the benchmark 10-year US T-bond yield and gold could come under pressure with a break above that level.”

“On Wednesday, the Automatic Data Processing (ADP) Research Institute will publish the private sector employment report, which is expected to show an increase of 403,000 in payrolls in March. On Thursday, the ISM Manufacturing PMI will be featured in the US economic docket ahead of Friday’s Nonfarm Payrolls (NFP) report. Usually, the NFP is seen as high-impact data that could ramp up market volatility with a large divergence from the market consensus. However, the trading action in financial markets is likely to turn subdued with trading conditions thinning out due to the Good Friday holiday.”

“The initial support is located at $1,724 (20-day SMA) ahead of the key $1,720 (Fibonacci 23.6% retracement of the Feb. 2-Mar. 8 drop) level. A daily close below the latter could trigger a technical selloff toward $1,700 (psychological level).”  

“Strong resistance is located at $1,745 (Fibonacci 38.2% retracement) before $1,767 (Fibonacci 50% retracement) and $1,780 (50-day SMA). A bullish shift in the technical outlook could occur if gold manages to flip $1,745 as support.”