Gold is consolidating Friday’s bounce from the long-held support at $1850, buoyed by a broadly weaker US dollar, courtesy of the covid vaccines-led optimism. Expectations of imminent vaccines weigh on the safe-haven dollar, offering some support to gold. Further, rekindling of the US fiscal stimulus hopes by the Treasury Secretary last Friday also helps the metal.

However, the risk-on rally in stocks likely caps the additional upside in XAU/USD while markets reassess the impact of the economic lockdowns heading into the Thanksgiving week.   

How is gold positioned technically?

Gold: Key resistances and supports

The Technical Confluences Indicator shows that the XAU/USD pair is defending the powerful support at $1871, which is the convergence of the previous low on the four-hour, Fibonacci 38.2% one-week and Bollinger Band one-hour Middle.

A dense cluster of resistances are lined up around $1875, where the SMA10 one-day coincides with Fibonacci 23.6% one-day and previous high four-hour.

Further up, the next target awaits immediately at $1878, which is the Fibonacci 23.6% one-month.

Buyers will then aim for the confluence of the Fibonacci 61.8% one-week and Pivot Point one-day R1 at $1882.

However, the Pivot Point one-day R2 at $1891 remains the level to beat for the bulls.

To the downside, acceptance below the abovementioned $1871 support could open floors for a test of $1864. That level is the meeting point of the Fibonacci 23.6% one-week and Bollinger Band one-hour Lower.

The previous month low of $1860 will be next on the sellers’ radars.

A sharp drop towards the intersection of the previous week low and Pivot Point one-day S2 at $1852/50 cannot be ruled if the bears extend control below the $1860 level.

Here is how it looks on the tool


About Confluence Detector

The TCI (Technical Confluences Indicator) 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. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.

Learn more about Technical Confluence