The price of gold extended its corrective deficit on Monday, reversing half of last week’s gains, as the demand for a safe haven for the US dollar remains unchanged amid broad risk aversion. Investors are concerned about the growing incidence of Delta coronavirus variants worldwide and its impact on the pace of economic recovery. Markets are in a state of “selling all” and seem to trust only the absolute reserve currency, the US dollar, in times of panic and uncertainty. Meanwhile, mixed US retail sales and consumer sentiment have pushed up inflation risks as the Fed prepares to ease monetary policy.
Limiting sentiment around the price of gold, Indian gold was offered at a discount after a rise in local prices that reduced demand for the metal. The sale also started after breaking the price of SMA200 gold one day and closed the week below the last. Looking ahead, the price of gold is in danger of falling deeper amid a lack of sound support levels.
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Gold price: Basic levels of monitoring
The Technical contribution detector indicates that the price of gold has exceeded all key support levels, as the sale starts towards a small four-hour high at SMA100 $ 1796.
Further south, strong support at $ 1792 will test the falling commitments. This level is the contribution of the SMA100 of one day, the central point S1 of one week and the lowest of the previous week.
The last line of defense for golden bulls appears in the Fibonacci 23.6% a month at $ 1790.
On the other hand, the immediate resistance is lined up around $ 1809, where SMA10 one day, Fibonacci 61.8% one week and the previous day low convergence.
Gold buyers need to find a strong base above $ 1813 to unleash further recovery gains. At this point, SMA50 four hours, SMA200 one hour and Bollinger Band one hour medium merger.
The bulls will then aim to cross the Fibonacci 38.2% one week and the Fibonacci 23.6% one day at $ 1815.
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About the Technical Contribution Detector
The TCD (Technical Confluences Detector) is a tool for locating and marking those price levels where there is congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. If you are a short-term trader, you will find entry points for counter-strategies and chase a few points at a time. If you are a medium and long term trader, this tool will allow you to know in advance the price levels where a medium to long term trend can stop and rest, where to relax positions or where to increase position size.