Gold Price Forecast: XAU/USD bulls aim for $1,680 – Confluence Detector

• Gold price extends the week-start recovery towards a short-term key hurdle.
• Risk-on mood weighs on DXY despite hawkish Fed bets, US inflation expectations.
• Lack of major directives facilitates the extension of the previous trend even as central banks, recession woes test XAU/USD.

Gold price (XAU/USD) remains on the front foot for the second consecutive day amid firmer market sentiment during early Tuesday. The metal’s latest recovery takes clues from the receding fears of the UK’s market collapse after the British Chancellor reversed the previous promises. Also favoring the yellow metal could be a lack of major data/events, as well as hopes of further stimulus from Japan, China and the UK. It’s worth noting that the chatters surrounding the easing recession woes in the bloc and hawkish comments from the European Central Bank (ECB) policymakers also contributed to the precious metal’s latest strength.

Moving on, a light calendar can keep XAU/USD buyers in command, considering the softer greenback. However, any negative surprises for the risk profile won’t be taken lightly as the latest recovery in prices remain doubtful, especially amid the hawkish central banks and recession woes.

Also read: Gold Price Forecast: XAU/USD defends the new support at $1,644, but for how long?

Gold Price: Key levels to watch

The Technical Confluence Detector shows that the gold price is approaching the immediate resistance placed at $1,669, comprising Bollinger Band one-day Middle.

Following that, a convergence of the previous yearly low, 200-HMA and Fibonacci 61.8% on weekly constitute a tough nut to crack for the XAU/USD buyers around $1,679.

It’s worth noting, however, that a clear upside break of $1,679, as well as the $1,680 round figure, will need validation from the mid-month top surrounding $1,683 before directing the bulls toward the $1,700 threshold.

Alternatively, Fibonacci 23.6% on weekly and 50-HMA offers immediate support to the metal during the pullback moves around $1,655.

In a case where the commodity prices drop below $1,655, the previous daily low and Fibonacci 23.6% in one month could challenge the gold bears to around $1,643.

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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.