Ella 
Gold prices (XAU/USD) fell for a fourth day in a row, even as bears struggled to win approval ahead of the US ratings data. Gold prices reflected cautious optimism among traders as U.S. markets returned from a long holiday.
Still, doubts about China’s ability to defend its economic recovery sent U.S. Treasury yields higher, which in turn underpinned the dollar’s rebound during the subdued session.
Notably, Friday’s upbeat U.S. non-farm payrolls (NFP), an upbeat revision to U.S. growth forecasts from global ratings agency Moody’s and Cleveland Fed President Loretta Mester’s J. Mester’s hawkish comments seem to be keeping the dollar strong and putting downward pressure on gold prices.
Elsewhere, risk-positive news from China’s largest real estate company, Country Garden, and the Chinese government’s efforts to defend the economic recovery through a variety of qualitative and quantitative measures, which should have stimulated gold bears, have failed to do so amid the recent strengthening of the US dollar.
Looking ahead, the full market reaction to the latest shift in sentiment, today’s release of U.S. factory orders for July, and Fed concerns will all be important points to watch for direction.
According to our technical confluence indicator, the price of gold is stabilizing above the support confluence of $1,930-32, which includes the one-day pivot point 2 and the 50-day SMA and the 200-hour SMA on the 4-hour chart.
However, the confluence of the one-day pivot point 1 and the 61.8% retracement within one month and the bottom of the Bollinger Channel on the 4-hour chart is close to $1935, limiting the short-term downside of gold prices.
Once it falls below $1930, the confluence of the 200-day SMA, the middle rail of the Bollinger Band and the 38.2% retracement within a month is close to $1915, which will serve as the last line of defense for gold/dollar bulls.
On the contrary, the 38.2% retracement level within one day and the confluence of the middle rail of the Bollinger Band on the 4-hour chart are close to $1945, forming short-term upward resistance. After that, the one-day pivot point 3, the confluence of the 100-day SMA and the one-day 161.8% retracement around $1955 acted as a strong barrier.
It is worth pointing out that a break above $1955 would prompt gold bulls to point to multiple resistance levels in May and July, near $1985.
