Gold Price Forecast: XAU/USD remains on track to test key $1792 support – Confluence Detector

Gold price is extending its corrective downside on Monday, reversing half the previous week’s gains, as the safe-haven demand for the US dollar remains unabated amid broad risk-aversion. Investors fret about the escalating Delta coronavirus variant cases globally and its impact on the pace of the economic recovery. Markets are in a ‘sell everything mode’ and seem to trust only the ultimate reserve currency, the US dollar, in times of panic and uncertainty. Meanwhile, mixed US Retail Sales and Consumer Sentiment data spurred inflation risks on growth, as the Fed prepares for monetary policy normalization.

Further dampening the sentiment around gold price, Indian gold was offered at discount after a jump in local prices curbed demand for the metal. Sell-off also ensued after gold price breached the SMA200 one-day support and closed the week below the latter. Looking forward, gold price risks deeper declines amid a lack of healthy support levels.

Read: Delta Doom is set to storm America, the dollar could emerge as top dog

Gold Price: Key levels to watch

The Technical Confluences Detector shows that gold price has taken out all the key support levels, as the sell-off resumes towards a minor cap at SMA100 four-hour of $1796.

Further south, powerful support at $1792 will test the bearish commitments. That level is the confluence of the SMA100 one-day, pivot point one-week S1 and the previous week low.

The last line of defense for gold bulls is seen at the Fibonacci 23.6% one-month at $1790.

On the flip side, immediate resistance is aligned around $1809, where the SMA10 one-day, Fibonacci 61.8% one-week and the previous day low converge.

Gold buyers need to find a strong foothold above $1813 to unleash further recovery gains. At that point, SMA50 four-hour, SMA200 one-hour and Bollinger Band one-hour Middle merge.

Up next the bulls will target the intersection of the Fibonacci 38.2% one-week and Fibonacci 23.6% one-day at $1815.

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.