- The price of gold is set for a positive end to the week on the back of a broad-based weakening of the US dollar.
- Dovish Federal Reserve outlook, soft trading will continue to support gold price.
- Gold price is set for a tough battle heading into US NFP week, $1,775 remains in sight.
The price of gold challenges bearish commitments near the $1,760 round mark, extending its positive momentum for a fourth straight trading day. The bright metal is on track to post weekly gains after a negative finish a week ago. Broad-based weakness in the U.S. dollar remains the underlying catalyst for gold’s recovery, as the Federal Reserve’s dovish minutes offered further steps in the greenback’s ongoing correction from more than two-decade highs. Weak U.S. data also added to pain in the dollar as traders held on to weekly gold price gains amid the Thanksgiving week. US Treasury yields also bore the brunt of Fed officials agreeing on the need for smaller rate hikes going forward. Attention now turns to US Nonfarm Payrolls (NFP) to be released in the US a week in advancewhich is one of the most important data watched before the December FOMC meeting.
Gold Price: Key Levels to Watch
The Technical confluence detector shows that the gold price is trying to clear strong resistance at $1,757, which is the 23.6% one-day and one-week Fibonacci convergence.
Immediate upside remains capped by the previous day’s high at $1,759, where the one-day SMA10 also coincides.
Another significant upper barrier is placed at $1,762, which is the 38.2% Fibonacci for the week.
A sustained move above the latter initiates a significant rally towards the one-day R3 pivot point at $1,769.
Next, $1,775 will be a tough nut to crack for gold bulls. At this level, the one-month R2 pivot point intersects the one-week Fibonacci 61.8%.
On the upside, immediate support is tied at the Fibonacci 61.8% one-day at $1,753, below which last week’s low at $1,749 will be tested.
The next best downside bet for gold bulls is the previous week’s low at $1,747, with further declines likely to test the one-day S3 pivot point at $1,741.
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About the technical coincidence detector
TCD (Technical Confluences Detector) is a tool for locating and pointing out those price levels where there is an overload of indicators, moving averages, Fibonacci levels, Pivot Points, etc. If you are a short-term trader, you will find entry points for countertrend strategies and hunt for several points at once. If you are a medium to long term trader, this tool allows you to know in advance the price levels where the medium to long term trend can stop and rest, where to unwind positions or where to increase your position size.