XAU/USD outlook: Weaker dollar and rising inflation lift gold

Slobodan Drvenica Windsor Brokers

Gold

Spot gold rose sharply on Wednesday (up 1.82% for the day, the second biggest daily advance in 2021) lifted by weaker dollar on further rise in US inflation and unclear situation regarding the start of tapering stimulus, which markets widely expected to begin in Nov/Dec.

Fresh advance broke through 200DMA ($1796) and hit one-month high, pressuring psychological $1800 barrier, break of which would generate fresh bullish signal for further advance.

Bullish daily studies support the near-term action which is currently riding on the third wave of five-wave cycle from $1721 (Sep 29 low).

Bulls extended above 100% of Fibonacci expansion that opens way towards targets at $1814 (FE 138.2%) and $1825 (FE 161.8%) in extension.

Thick daily cloud, above which the price emerged on Wednesday, underpins the action and cloud top ($1784) marks solid support, expected to keep the downside protected.

Res: 1800; 1808; 1814; 1820.
Sup: 1791; 1786; 1784; 1779.

Interested in XAU/USD technicals? Check out the key levels

1. R3 1844.96
2. R2 1820.57
3. R1 1806.76
PP 1782.37
1. S1 1768.56
2. S2 1744.17
3. S3 1730.36

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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