Gold Price Forecast: XAU/USD needs a break below $1,784 to extend the correction – Confluence Detector
NEW YORK (Aug 11) Gold price is keeping the corrective momentum intact, as it remains below the $1,800 mark. The bright metal is on its retreat from monthly highs of $1,808 after softer US inflation triggered a sharp sell-off in the dollar alongside the Treasury yields. Odds of a 75 bps September Fed rate hike have dropped to nearly 43% vs. 68% seen pre-inflation data release. The greenback is resuming its downtrend this Thursday, as markets continue to believe that a one-time softening in the price pressure is unlikely to dissuade the Fed from altering its monetary policy course. Therefore, the non-interest-bearing gold remains under pressure, helped by sluggish price action in the yields. Although the downside appears cushioned (for now) amid resurfacing US-China trade tensions and renewed covid lockdowns in some of the Chinese cities and towns.
Also read: Gold Price Forecast: Bear cross outweighs softer US inflation, 50 DMA support at risk
Gold Price: Key levels to watch
The Technical Confluence Detector shows that the gold price is challenging the $1,787 support, which is the SMA5 one-day and the previous day’s low.
The next crucial downside cap for XAU/USD is aligned at $1,784, the convergence of the SMA50 one-day and the Fibonacci 23.6% one-week.
Should sellers manage to find a strong foothold below the latter, a fresh drop towards the Fibonacci 38.2% one-week at $1,780 will be on the table.
FXstreet
