Gold (XAU/USD) is edging higher in Tuesday’s trading so far, benefiting from falling Treasury yields and tepid risk tone. Markets appear to have turned risk-averse, re-assessing their bets on faster US economic recovery amid a potential hike in tax rates while covid restrictions in Europe also dampen the mood.
However, a recovery in the US dollar amid the worsening of the risk sentiment could limit the gains in the metal. Gold fell on Monday after stronger US economic data triggered a fresh record rally in Wall Street indices, which dulled the attractiveness of the traditional safe haven.
How is gold positioned on the technical graphs?
Gold Price Chart: Key resistance and support levels
The Technical Confluences Detector shows that gold is challenging powerful resistance at $1736, which is the convergence of the pivot point one-day and the previous week high.
The next relevant upside hurdle is placed at $1741, the Fibonacci 161.8% one-day.
Acceptance above the latter is likely to expose $1747, the pivot point one-day R3.
The pivot point one-week R1 at $1750 could guard the further upside.
Alternatively, strong support at $1729 could be tested if the bearish momentum resumes. That level is the intersection of the Fibonacci 61.8% one-month and Fibonacci 61.8% one-day.
Further south, the Fibonacci 23.6% one-day at $1725 will try to protect the XAU buyers.
The confluence of the previous day low and pivot point one-day S1 at $1721 could challenge the bearish commitments.
The last line of defense for the XAU bulls is aligned at the pivot point one-day S2 – $1716.
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. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.
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