- 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
|Today last price||1767.93|
|Today Daily Change||-27.87|
|Today Daily Change %||-1.55|
|Today daily open||1795.8|
|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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