Gold Price Forecast: XAU/USD remains on track to test May lows at $1766 – Confluence Detector

• Gold is retracing the Asian rebound despite weaker DXY, yields.
• Fed’s anxiety over inflation fears and next policy move keep investors on the edge.
• Gold Weekly Forecast: Sellers look to retain control following uninspiring rebound

Gold price is retracing the rebound seen earlier in the Asian session, unable to take advantage of the renewed weakness in the US dollar and the Treasury yields. The bulls turn cautious amid increased uncertainty over the Fed’s next monetary policy move after last week’s mixed messages from the officials of the world’s most powerful central bank. Meanwhile, weaker-than-expected PCE Price Index data failed to douse inflation fears. Investors are also monitoring progress on the negotiations over a US infrastructure deal.

In absence of any relevant US economic data, the broader market sentiment and the dollar’s dynamics will be closely followed for gold price action. The main event risk for this week remains the US Nonfarm Payrolls due on Friday.

Read: Gold price analysis: Gold is sideways at $1770/oz – $1790/oz

Gold Price: Key levels to watch

The Technical Confluences Detector shows that gold price has faced rejection at $1786, which is the convergence of the Fibonacci 23.6% one-day, SMA50 four-hour and previous high four-hour.

Given that, gold price has accelerated its retreat below a dense cluster of critical support levels around $1780.

At that point, the Fibonacci 61.8% one-day, SMA5 four-hour and SMA100 one-hour coincide.

Sellers now target the previous day’s low of $1774, below which the previous month’s low of $1766 remains on their radars.

On the flip side, recapturing the $1786 hurdle is needed to unleashing the additional upside towards the previous day’s high of $1791.

Further north, the previous high at $1795 could challenge the bullish commitments.

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.