Gold is currently suffering from a meltdown together with the stock markets as the US Treasury yields keep surging on elevated growth coupled with inflation forecasts. The precious yellow metal has no yield, and the investors appear more attracted to bitcoin in recent months. Where will all this stop?
Meanwhile, XAU/USD is consolidating. The Technical Confluences Detector indicates that gold has formed some support at $1,725, which is currently the convergence of the Pivot Point one-week and the previous 15-minute-low.
A more considerable cushion has formed at $1,712 which is the place where the PP one-month support 2 hits the market price. Looking lower, bears may also target $1,687, which is the spot where the traders find the PP one-week S3.
On the other hand, looking up, some resistance has formed at $1,741, which is the confluence of the PP one-day S2 and the Simple Moving Average (SMA) 5-15m. Slightly higher, another resistance that was previously a support level awaits at $1,753. That is the meeting point for the PP one-week S1 and the PP one-day S3.
Further up there is another resistance at $1,760 where the SMA 5-1h and the Bollinger Band 4h-Lower meet.
The Confluence Detector discovers interesting opportunities while using Technical Confluences (TC). TC is described as a tool that locates and then points out the price levels where there is a congestion of indicators, Pivot Points, Fibonacci levels, moving averages, and others.
The traders need to know where the congestion points have formed, to enable them to come up with successful trading strategies. Currently, most indicators point to $1,712 as the nearest reliable support level for gold.