Gold off daily highs but the bullish potential remains intact

Gold price is easing back towards $1750, having refreshed four-day highs at $1760 in the last hours. Despite the minor pullback, the bullish potential in gold price remains intact amid the ongoing weakness in the Treasury yields, which remains a drag on the US dollar. The returns on the market sag, as investors turn cautious amid the continued spread of the Delta covid variant cases and uncertainty over the Fed’s next monetary policy move. Softer US CPI and upbeat PPI data have left the markets in limbo, given the recent expectations about the Fed’s tapering. Looking ahead, the US Preliminary UoM Consumer Sentiment could provide fresh hints on the economy, impacting the USD valuations, in turn, gold.

The Technical Confluences Detector shows that gold tested the powerful resistance at $1760, which is the convergence of the previous week’s low and Bollinger Band one-hour Upper. Acceptance above the latter is needed to take on the immediate resistance at $1762, the pivot point one-day R1. The next significant upside target is envisioned at $1767, the previous month’s low, around where the pivot point one-day R2 coincides. Alternatively, bears need to find a strong foothold below the fierce support at $1754. Sellers will then aim for the $1750 support area. A dense cluster of support levels around $1744 could then test the bearish commitments.