Gold Price Forecast: XAU/USD bears target $1,720 as US dollar keeps reins – Confluence Detector

• Gold price extends its losing streak into the sixth straight day on Monday.
• US dollar resumes its rally as risk-aversion gathers steam amid surging energy costs.
• XAU/USD needs to crack $1,730 to extend the sell-off towards $1,720 and $1,714.  

Gold price remains under intense selling pressure at the start of the week, extending the previous week’s bearish momentum into the sixth straight day. The relentless demand for the safe-haven US dollar could be linked as the main underlying factor behind the latest sell-off in the bright metal. Investors witness flight to safety amid hawkish Fed expectations and surging energy costs in Europe and Asia after Russia’s Nord Stream 1 pipeline announced its closure due to maintenance end of this month. Global central banks’ fight to tame inflation is likely to prolong amid rising food and energy prices, which dents risk appetite while weighing negatively on the non-interest bearing yellow metal. Gold traders shrug off the minor pullback in the US Treasury yields, as the dollar will likely remain the preferred safety bet heading into the much-awaited Kansas City Fed’s Jackson Hole Symposium, scheduled later this week.

Also read: Gold Price Forecast: Will XAU/USD bulls defend the 50% Fibo support?

Gold Price: Key levels to watch

The Technical Confluence Detector shows that the gold price is eyeing a fresh downswing towards the Bollinger Band one-day Lower at $1,720 should bears yield a sustained break below the $1,730 barrier. That level is the intersection of the pivot point one-day S3 and pivot point one-week S1.

The next critical support area is located around $1,714, the Fibonacci 232.6% one-month.

Alternatively, the metal could rebound towards the pivot point one-day S2 at $1,737 should bears face exhaustion.

Further up, the pivot point one-day S1 at $1,743 will come into the picture. Bulls will then look to recapture the previous day’s low of $1,746.

The last line of defense for XAU sellers is envisioned at the confluence of the SMA200 four-hour and the Fibonacci 23.6% one-day around $1,750.

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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.