Following a violent sell-off to two-month lows of $175 on Tuesday, gold is licking its wounds. In the face of the rapid spread of the Delta covid strain, the US dollar continued its current gain as risk-off sentiment flared up on increased fears about the coronavirus pandemic and its influence on global economic recovery. The dollar benefited from the Fed’s hawkish stance, as “very confident” Fed Governor Christopher Waller indicated the world’s most powerful central bank might dismantle QE as soon as this year, while raising rates in late 2022. The attractiveness of gold is dwindling as the currency strengthens.
The focus now shifts to vital US employment statistics, with the leading indicator – ADP – set to be released at 1215 GMT. The all-important US NFP report on Friday, though, might determine gold’s future trajectory.
Nonfarm Payrolls from ADP Preview: Going against the grain? What is the best way to trade this leading indicator?
The Technical Confluences Detector indicates that gold is trading below a cluster of key resistance levels, the closest of which is at $1764, the previous week’s low.
The next hurdle for gold bulls will be the junction of the previous month’s low and the SMA5 four-hour at $1766.
The Fibonacci 61.8 percent one-day at $1769 will protect the upside further up. If purchasing demand picks up, gold prices might rise above $1776, where the Fibonacci 61.8 percent one-week and SMA100 one-hour convergence.
On the other hand, the Fibonacci 23.6 percent one-day at $1758 could act as a floor, allowing for a retest of the two-month lows of $1751.
The bearish commitments will be tested when the pivot point one-day S1 and pivot point one-week S2 cross at $1748.
Should the above-mentioned solid support give way, sellers could target the Fibonacci 161.8 percent one week at $1744.

The TCD (Technical Confluences Detector) is a tool that locates and highlights price levels where indicators, moving averages, Fibonacci levels, Pivot Points, and other indicators are converging. If you’re a short-term trader, you’ll look for counter-trend entry points and hunt for a handful at a time. If you’re a medium-to-long-term trader, this tool will help you predict where a medium-to-long-term trend will halt and rest, where you should unwind positions, and where you should raise your position size.
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