A small rebound effort has been made by the Gold price from its six-week bottom of $1742 amid a decline in US Treasury rates, as the risk-off mentality continues to be in full swing. So far, the return on the benchmark 10-year US Treasury note has fallen by around 2 percent. A combination of rising concerns around China’s heavily indebted property giant Evergrande and the possibility of a worldwide economic recession is reducing traders’ desire for risky assets.
A further rise in gold prices, on the other hand, looks to be difficult, owing to a broad-based strengthening of the US dollar, as the Federal Reserve’s reduction forecasts and risk-aversion bolster the greenback’s safe-haven attraction. Moving ahead, the Gold price will continue to be vulnerable to downside threats, as traders choose to keep onto the US dollar ahead of the Federal Reserve’s policy meeting this week.
Price Of gold: Critical Factors to Monitor
Gold’s efforts to rebound after reaching $1755 in price barrier face an additional hurdle from the Technical Confluences Analyzer. The Fibonacci 61.8% one-day as well as the Bollinger Band one-hour Higher Band values overlap at such level.
XAU/USD CHART. Source: Tradingview.com
Gold bulls may break the barrier around $1761, where the Fibonacci 38.2 percent and 23.6 percent one-day and one-week Fibonacci lines converge if the rebound gathers traction. The 23.6 percent Fibonacci bearish one-day price of $1764 at $1361 might confirm support levels. A rebound will be hindered so long as the Gold value stays below $1770, which is the 38.2% Fibonacci retracement point of the one-week cycle.
The initial fall is offset by the day’s recent low of $1747, which may be followed by a price drop of $1742 for Gold bulls. The prior bottom of four hours and the Fibonacci 38.2 percent band span for one month connect at that moment. A prolonged dip under the Fibonacci 161.8% Fibo one-day and hinge point one-day S2 level at $1735 might spell bad news.
Tech Confluences Detector
The TCD (Technical Confluences Detector) is a data analysis technique that is used to identify and highlight market prices where there is a convergence of markers, moving averages, Fibonacci levels, Pivot Points, and other chart patterns. If you’re a short-term trader, you’ll look for points of entry for neutralizing techniques and search for a few points at a time while you’re learning the ropes. In the case of traders who trade on a medium- to long-term basis, this instrument will allow you to know in front the price levels at which a medium- to long-term trend is likely to halt and rest, as well as the price levels at which to unwind holdings or raise the size of your bet.