Gold Price Forecast: XAU/USD consolidates gains below $1790 amid firmer yields


  • Gold consolidates the recent upside on Thursday near $1790.
  • Higher US Treasury yields fail to uplift the demand for the US dollar.
  • Higher inflation worries, Fed’s tapering catching investor attention.

Update: Gold price is consolidating at the highest levels seen so far this week at $1789, as the buying pressure remains unabated amid a corrective decline in the US dollar across the board. Robust American corporate earnings reports have come to the rescue of gold bulls, as upbeat results drove the Wall Street indices to fresh record highs, weighing negatively on the dollar’ safe-haven demand. However, the upside attempts in gold price appear limited, as the US Treasury yields continue its run higher amid hawkish Fed’s bets and rising inflation expectations.

Gold traders now await the US weekly Jobless Claims and Fedspeak for fresh trading opportunities, as the broader risk sentiment will continue to remain the main market motor.

Read: US Dollar Index, gold, silver: A confluence of signs this week

 

Gold trades with minute gains on Thursday after testing the high near to $1,790 in the US session. The US benchmark 10-year Treasury yields rose above 1.65% reducing non-yielding bullion’s appeal. 

The US Dollar Index, which tracks the performance of the greenback against the basket of six major currencies, trades lower below 94.00 with 0.02% losses, making gold attractive for the other currencies holders. The greenback weighed down as the expectations mounted of faster monetary policy tightening among other major central banks and as the global equity market extended the rally sapping demand for the greenback.
 
The US T-bond yields rise for the fourth-straight session at 1.66% with more than 1% gains, the highest in the five months. Investors remained optimistic about the US economic recovery amid strong corporate earnings amid higher inflationary pressures due to soaring energy prices. Gold is generally considered a hedge against inflation and currency volatility. A hawkish move by the major central banks would diminish gold’s appeal. 

XAU/USD daily chart

Gold prices posted gains of about $20 in the previous session after testing the high at $1,788 mark in the previous session. The prices crossed above the 21-day Simple Moving Average (SMA) at $1,759.23 on October 13. The descending trendline from the high of $1,834.02 made on September 3, acts as a strong resistance for the bulls.

The Moving Average Convergence Divergence (MACD) holds below the midline with a bullish crossover. Any uptick in the MACD indicator would amplify the buying pressure and the prices would approach Friday’s high of $1,796.50. A daily close above the mentioned level would entice bulls to retest the $1,810 horizontal resistance level. XAU/USD bulls could meet the September, 7 high at $1,827.32.

Alternatively, if the prices break below the intraday low, it could retrace back to the $1,770 horizontal support level. Furthermore, a successful break of the 21-day SMA at $1,760 could mean more downside for gold toward the $1,750 horizontal support level. A break of the mentioned support level would open the gates for the further lower levels, the bears will keep their eyes on the $1,730 horizontal support level.

XAU/USD

Overview
Today last price 1781.81
Today Daily Change -0.34
Today Daily Change % -0.02
Today daily open 1782.15
 
Trends
Daily SMA20 1760.69
Daily SMA50 1779.01
Daily SMA100 1793.94
Daily SMA200 1794.28
 
Levels
Previous Daily High 1788.46
Previous Daily Low 1766.96
Previous Weekly High 1800.62
Previous Weekly Low 1750.24
Previous Monthly High 1834.02
Previous Monthly Low 1721.71
Daily Fibonacci 38.2% 1780.25
Daily Fibonacci 61.8% 1775.17
Daily Pivot Point S1 1769.92
Daily Pivot Point S2 1757.69
Daily Pivot Point S3 1748.42
Daily Pivot Point R1 1791.42
Daily Pivot Point R2 1800.69
Daily Pivot Point R3 1812.92

 


 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD climbs above 1.1250 as investors eye coronavirus headlines

EUR/USD preserved its recovery momentum early Friday and rose above 1.1250 during the European trading hours. Markets are doubting the Fed's policy tightening prospects as the new coronavirus variant revives concerns over the economic recovery losing steam.

EUR/USD News

GBP/USD rebounds toward mid-1.3300s on broad dollar weakness

GBP/USD reversed its direction after dipping below 1.3300 earlier in the day and started to push higher toward 1.3350. The greenback is facing heavy selling pressure amid the sharp decline witnessed in the 10-year US Treasury bond yield.

GBP/USD News

Gold clings to strong gains above $1,800 as US T-bond yields plunge Premium

Gold staged a decisive rebound on Friday and reclaimed $1,800. The intense flight to safety is causing US Treasury bond yields to fall sharply and fueling XAU/USD's rally. Investors await news on vaccines' effectiveness against the new COVID variant.

Gold News

Cardano could tank to $1 if ADA fails to defend crucial support

Cardano price is currently hovering below a freshly shattered 6-hour demand zone, ranging from $1.68 to $1.79. This resulting crash could extend to the immediate and critical foothold at $1.40. 

Read more

Black Friday 2021 Discounts!

Do you want to take your trading skills to the next level? Now you have a chance of leaping forward at attractive introductory rates. For Black Friday, FXStreet is offering discounts of up to 50% on its upgraded Premium plans. 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures