Gold Price Forecast: XAU/USD in search of fresh direction, key levels to watch – Confluence Detector

• Gold price picks up fresh bids but remains confined within a familiar range.
• Easing Omicron fears, Fed’s hawkish bets weigh on gold while USD recedes.
• Gold sellers eye $1,750 as Fed stays on tightening path.

Gold price is picking up from where it left on Monday, having witnessed a bearish start to a relatively quiet week. Easing concerns over the new Omicron covid variant combined with the faster-tapering expectations from the Fed next week are putting a lid on gold’s upside. Further, a strong technical hurdle around $1,792 and an upbeat market mood could also keep gold bulls at bay. All eyes remain on Friday’s US inflation data for the next direction in gold price.

Read: Gold Price Forecast: Depressed amid a better market mood

Gold Price: Key levels to watch

The Technical Confluences Detector shows that the gold price is trading just above the critical resistance now support at $1,780, where the SMA5 one-day, Fibonacci 38.2% one-week and one-day converge.

If gold bulls sustain above the latter, then a test of the $1,785 hurdle will be inevitable. That level is the confluence of the SMA50 four-hour and SMA200 one-hour.

Immediate upside will then be capped by the Fibonacci 23.6% one-month at $1,787. 

Doors will further open up towards $1,792, the powerful supply zone comprising of the SMAs 50, 100 and 200 one-day. The Fibonacci 61.8% one-week also aligns at that point.

Buyers will look for fresh entries above the latter, with eyes on the $1800 level – the pivot point one-day R3.

On the flip side, a failure to resist above the aforesaid $1,780 barrier, will recall sellers to test the previous day’s low of $1,776. The SMA5 one-day appears at that level.

The next stop for gold bears is seen at $1,773, the Fibonacci 23.6% one-week, below which the pivot point one-day S2 at $1,769 could get tested.

Further south, a test of the November lows of $1,759 will be in the offing.

Here is how it looks on the tool

About Technical Confluences Detector

The TCD (Technical Confluences Detector) 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.  If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.