Gold Price Analysis: Range play likely for XAU/USD amid US-China talks, levels to watch – Confluence Detector

Gold (XAU/USD) is on the defensive, treading water amid the recent surge in the US Treasury yields that lifted the dollar alongside. Thursday’s sudden rally in the rates countered the dovish Fed expectations, as investors bet on faster economic recovery and higher inflation. The BOE also echoed the Fed’s stance on monetary policy.

However, the downside in gold remains cushioned by the renewed jitters around the US-China talks and the slump in the global equities amid inflation fears. In the day ahead, the dynamics in the bond markets and US-China talks will continue to influence sentiment around the yellow metal, as the US docket remains data-dry.

How is gold positioned on the charts?

Gold Price Chart: Key resistance and support levels

The Technical Confluences Detector shows that gold is defending the powerful $1732 support, which is the intersection of the SMA5 four-hour, Fibonacci 38.2% one-day and SMA5 one-day.

A dense cluster of healthy support levels awaits around $1727, where the SMA50 four-hour and Fibonacci 23.6% one-week coincide.

The relevant downside target is placed at the previous month low of $1717.  

Alternatively, the XAU bulls need to clear the previous week high at $1740 on a sustained basis in order to revive the upside momentum.

Further up, the pivot point one-week R1 at $1750 could be challenged.

The bulls would then target the fierce resistance at $1755, which is the confluence of the Fibonacci 23.6% one-month, previous day high and pivot point one-day R1.

A firm break above that level could expose the pivot point one-day R2 at $1773.

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.