Gold Price Forecast: XAU/USD eyes a sustained move below $1,800, downside appears limited – Confluence Detector

• Gold price keeps falling, with eyes on the critical $1,800 mark.
• Surging coronavirus cases globally lift the US dollar’s safe-haven demand.
• Gold 2022 Outlook: Correlation with US T-bond yields to drive yellow metal.

Gold price is extending the previous correction from monthly highs of $1,820, as the US dollar regains poise amid risk-averse market conditions. Investors remain wary amid surging covid cases globally, despite studies showing the Omicron variant as less severe. Increased March Fed rate hike bets also turn gold out of favor. Also, thin liquidity and year-end profit-taking keep gold price on the defensive.

Read: Gold Price Forecast: XAU/USD down but not out while above the $1,800 mark

Gold Price: Key levels to watch

The Technical Confluences Detector shows that the gold price is approaching a powerful demand area around $1,801-$1800, which is the convergence of the SMA50 one-day, SMA50 four-hour and Fibonacci 38.2% one-week.

A sustained break below the latter will put the SMA200 one-day of $1,798 to test. The next downside target is aligned at $1,794, where the pivot point one-day S2 coincides with the Fibonacci 61.8% one-week.

Sellers will then look out for the pivot point one-week S1 at $1,792, below which the SMA100 one-day at $1,790 will get probed.

On the other hand, if the $1,800 mark holds, then a rebound towards the Fibonacci 23.6% one-week at $1,806 cannot be ruled out.

Further up, the confluence of the Fibonacci 23.6% one-day and SMA5 one-day at $1,809 will come into play, followed by the previous week’s high of $1,811.

The meeting point of the Fibonacci 61.8% one-day and pivot point one-day R1 at $1,815 will be the level to beat for gold bulls.

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.