Gold Bounces Off $1,810 – 61.8% Fib Level in Focus
Skerdian Meta • 2 min read
Gold prices remained near a three-month low on Friday as the strongest dollar in two decades continued to sap demand for greenback-priced bullion, setting the stage for the metal’s fourth weekly drop. GOLD is attempting to recover after a recent drop to a new three-month low near $1,800. As global growth and inflation fears persist, the market’s perception of risk sentiment and its impact on US dollar valuations remain critical.
The US inflation and expectations of aggressive Fed tightening reignited global economic slowdown fears, prompting investors to seek refuge in the ultimate safe-haven currency, the US dollar.
The dollar remained close to a new 20-year high on Thursday as fears remained that the Federal Reserve’s actions to tame inflationary pressures would crimp global economic growth, boosting the currency’s safe-haven appeal.
Looking ahead, as the turbulent week comes to an end, the end-of-week flows and dollar dynamics will continue to play a pivotal role in gold price action.
Gold Technical Outlook
The Gold Price aims for a test of the Fibonacci 23.6 percent one day at $1,830 on its way back up. Regaining that level will put minor resistance at $1,834 in the sights of XAU buyers. To confirm a meaningful recovery, gold bulls must establish a strong foothold above the confluence of the Fibonacci 38.2 percent one day and SMA200 one day at $1,836.
The next stop for bullish traders is the Fibonacci 61.8 percent one-day at $1,843, above which the $1,847 barrier will be challenged. At that point, the pivot points one-month S1 and one-day R1 intersect.
On the downside, strong support can be found near $1,823, which is the intersection of the previous day’s low and the pivot point one-week S2.
A breach of the last will set off a new downswing towards the intraday low of $1,810, below which the $1,808 cap will be gold bulls’ last line of defense. Good luck!