Gold Price Drops Below $1,960 as Bank Fears Ease and China's Mixed Outlook Pressures Demand

Bullion Bite
Gold Price Drops Below $1,960 as Bank Fears Ease and China's Mixed Outlook Pressures Demand

Gold price (XAU/USD) has dropped to a fresh intraday low of $1,955 as bears struggle to retake control, after an earlier retreat, during Tuesday’s European session. The cautious mood ahead of this week’s key inflation clues from Europe and the US, as well as the mixed comments from the European Central Bank (ECB) and the Federal Reserve (Fed) officials, have prodded the Gold sellers of late. This has led to the Gold price seesawing around the $1,960 level, which comprises the previous monthly high and 200-HMA.

According to the Technical Confluence Detector, the middle band of the Bollinger on the 15-minute chart adds strength to the stated trading filter. Given the ongoing bearish bias, a sustained downside break of $1,960 could quickly drag the Gold price towards $1,951 support confluence comprising the Fibonacci 23.6% on one-week and one-day. Furthermore, pivot point one-week S1, around $1,938, and previous weekly low near $1,936, could also challenge the Gold bears.

On the flip side, the precious metal’s successful trading above $1,960 support can allow the Gold buyers to flirt with the Fibonacci 61.8% on one-day and 5-DMA, around $1,968. Should the XAU/USD remain firmer past $1,968, Fibonacci 61.8% on one-week, close to $1,981, could act as the last defense of the Gold bears.

It’s worth noting that the market’s optimism surrounding the banking sector as policymakers try hard to allow all means to stop financial markets from busting, as well as the mixed headlines surrounding China, mostly downbeat, could also favor the XAU/USD sellers. However, the US Conference Board’s (CB) Consumer Confidence for March, as well as the second-tier housing and activity data, can direct intraday moves of the XAU/USD.

The Technical Confluences Detector is a tool that helps to locate and point out price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Short-term traders can find entry points for counter-trend strategies and hunt a few points at a time, while medium-to-long-term traders can use this tool 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 their position size.

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