Gold Price Forecast: XAUUSD readies for a descent towards $1,722 – Confluence Detector

• Gold Price returns to the red amid unabated US dollar demand.
• “Sell everything” mode persists, as risk-aversion remains at full steam.  
• XAUUSD sees more downside, with eyes on the $1,722 key support.

Gold Price sees a negative start to the week so far this Monday, as the US dollar regains traction towards fresh two-decade highs. Risk-off flows dominate, in the face of looming fresh lockdowns in Shanghai and recession fears, which boost the dollar’s safe-haven appeal. Tighter US labor market conditions lift the odds of a total of 150 bps Fed rate hike in July and September to roughly around 30% from about 15% before Friday’s NFP release. Investors reassess the risk of a recession, with “sell everything” mode back in vogue and the greenback emerging as the undisputed winner. The USD-priced gold, therefore, appears vulnerable to more pain ahead amid a data-light start to the US inflaton week.

Also read: Gold Price Forecast: XAUUSD consolidates near YTD low, seems vulnerable to slide further

Gold Price: Key levels to watch

The Technical Confluence Detector shows that Gold Price is gathering strength to yield a fresh downside leg, with the previous day’s low of $1,730 in sight.

A breach of the latter will expose the Bollinger Band four-hour Lower at $1,728. The line in the sand for XAU bulls appears at $1,722, which is the pivot point one-day S2.

Alternatively, acceptance above the powerful hurdle of $1,742 is needed to initiate any meaningful recovery. That level is the confluence of the SMA10 four-hour, Fibonacci 61.8% one-day and the Bollinger Band one-day Lower.

The next stop for bulls is seen at the Fibonacci 38.2% one-day at $1,744. The Fibonacci 23.6% one-week at $1,750 will guard the further upside, a failure of which will challenge the convergence of the pivot point one-month S2 and pivot point one-day 1 at $1,753.

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About Technical Confluences Detector

The TCD (Technical Confluences Detector) 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.  If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.