Gold Price Forecast: XAU/USD, hit by risk appetite, finds support below $1,770


  • Gold, rejected at $1,800, retreats to levels below $1,770.
  • Risk appetite and higher US bonds have hit gold futures.
  • XAU/USD's bearish momentum might increase below $1,745.

Gold futures have dropped sharply on Friday, hurt by a combination of factors that have boosted appetite for risk. The yellow metal has depreciated more than $30 after having topped at $1,800 on Thursday, to find supporet right below $1,770 during the afternoon US trading session.

Upbeat data and a rebound of US yields have weighed on gold

Bullion has given away Thursday’s gains with a risk rally and the recovery of US T-Bond yields denting the appeal of the safe-haven metal. The upbeat quarterly results at major banks with Goldman Sachs reporting a 66% increase on earnings in the third quarter to conclude a string of better than expected results this week have boosted investors’ optimism, offsetting fears about inflationary pressures and supply chain disruptions.

On the other hand, long-term US T-Bond yields have bounced up, with the 10-year bond, which had dropped from the 1.61% top hit on Monday to a 1.51% low on Thursday, has picked up to 1.55% on Friday, curbing attractive for gold, further.

The macroeconomic calendar has not been of any particular help for the safe-haven gold, either. The US retail sales have increased by 0.7% in September, according to data released by the Commerce Department on Friday,  beating market expectations of a 0.4% increment, although partially due to higher prices, namely in auto dealers who are struggling with a global shortage of computer chips.

XAU/USD: Breach of 1.745 support might accelerate the decline

From a technical perspective, XAU/USD seems to have found buyers at $1.770 area to take a breather after a 1.8% reversal. Below here, the next potential support area lies at $1,745 (October 6 low) which would open the path towards a key support area at $1,725 (September 29, 30 low).

On the upside, resistance levels remain at $1,807 (Sept. 15 high) ahead of $1.830, July and September’s peak. If that level is surpassed, the next potential target might be June 8 and 11 highs at $1,905.

Technical levels to watch

XAU/USD

Overview
Today last price 1767.93
Today Daily Change -27.87
Today Daily Change % -1.55
Today daily open 1795.8
 
Trends
Daily SMA20 1759.6
Daily SMA50 1776.81
Daily SMA100 1799.29
Daily SMA200 1796.17
 
Levels
Previous Daily High 1800.62
Previous Daily Low 1786.73
Previous Weekly High 1781.38
Previous Weekly Low 1746.07
Previous Monthly High 1834.02
Previous Monthly Low 1721.71
Daily Fibonacci 38.2% 1795.31
Daily Fibonacci 61.8% 1792.04
Daily Pivot Point S1 1788.15
Daily Pivot Point S2 1780.49
Daily Pivot Point S3 1774.26
Daily Pivot Point R1 1802.04
Daily Pivot Point R2 1808.27
Daily Pivot Point R3 1815.93

 

 

 

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