Gold Price Forecast & Analysis: Gold is edging higher in Tuesday’s trading so far, benefiting from falling Treasury yields and tepid risk tone. Markets appear to have turned risk-averse, re-assessing their bets on faster US economic recovery amid a potential hike in tax rates while covid restrictions in Europe also dampen the mood.
However, a recovery in the US dollar amid the worsening of the risk sentiment could limit the gains in the metal. Gold fell on Monday after stronger US economic data triggered a fresh record rally in Wall Street indices, which dulled the attractiveness of the traditional safe haven.
How is gold positioned on the technical graphs?
Gold Price Chart: Key resistance and support levels
The Technical Confluences Detector shows that gold is challenging powerful resistance at $1736, which is the convergence of the pivot point one-day and the previous week high.
The next relevant upside hurdle is placed at $1741, the Fibonacci 161.8% one-day.
Acceptance above the latter is likely to expose $1747, the pivot point one-day R3.
The pivot point one-week R1 at $1750 could guard the further upside.
Gold Price Forecast: Alternatively, strong support at $1729 could be tested if the bearish momentum resumes. That level is the intersection of the Fibonacci 61.8% one-month and Fibonacci 61.8% one-day.
Further south, the Fibonacci 23.6% one-day at $1725 will try to protect the gold buyers.
The confluence of the previous day low and pivot point one-day S1 at $1721 could challenge the bearish commitments.
The last line of defense for the gold bulls is aligned at the pivot point one-day S2 – $1716.