Gold Price Analysis: XAU/USD looks to $1880 after recapturing $1858 – Confluence Detector

• Gold price on the defensive but within range ahead of the US Retail Sales.
• US dollar holds steady while Treasury yields recede, as all eyes remain on Fed.
• Gold Weekly Forecast: XAU/USD tests key trend line ahead of FOMC meeting.

Gold price is attempting a minor recovery above $1850, although the bulls appear to lack conviction, as the US dollar continues to hover near monthly highs. Further, a renewed uptick in the US Treasury yields also caps the bounce in gold price. Despite the limited bullish potential, gold continues to draw support from a lack of clarity on the Fed’s next policy move, as the central bank’s two-day monetary policy meeting begins later this Tuesday.

In the meantime, the key event risk for gold price remains the US Retail Sales data due later in the NA session at 1230 GMT alongside the Producers Price Index (PPI) release. The US economic releases could offer some hints on the upcoming Fed’s announcement, significantly impact the dollar moves and gold as well.

Read: Gold Price Forecast: XAU/USD bears lacking conviction ahead of US Retail Sales, FOMC

Gold Price: Key levels to watch

The Technical Confluences Detector shows that gold price is gathering strength before it extends Monday’s recovery towards the previous week’s low of $1870.

The next upside target for gold bulls awaits at $1880, which is the convergence of the Fibonacci 23.6% one-month, previous day’s high and Fibonacci 23.6% one-week.

Further up, the confluence of the SMA100 one-hour and Fibonacci 38.2% one-week at around $1884 could be probed.

Meanwhile, a failure to hold onto a dense cluster of support levels around $1862, the pivot point one-week S1 and SMA5 four-hour, could call for further weakness.  

The next critical support is seen at $1858, where the Fibonacci 38.2% one-day meets the Fibonacci 38.2% one-month.

The psychological $1850 level could be the last line of defense for the buyers.

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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.