Technical Analysis

GOLD Analysis – November 09, 2021

By LonghornFX Technical Analysis
Nov 9, 20213 min

Gold’s Daily Price Analysis

Gold prices ended the day at $1826.45, having reached a top of $1828.15 and a low of $1813.80. Gold prices rose for the third straight session on Monday, reaching a two-month high, boosted by a decline in the dollar and lingering inflation fears following important central banks' indications that interest rates would remain low in the short term.

Gold rose on Monday as a result of the recent comments from Fed policymakers. The Vice-Chairman of the United States Federal Reserve, Richard Clarida, stated that inflation was running much above the desired goal for the central bank and that if it remained at the same level or higher, it would indicate a policy error.

Clarida also stated that price pressures are more than expected and that inflation will be higher this year than the Fed's most recent prediction. These remarks come on the heels of the Fed's declaration last week that it will hold its benchmark interest rate near zero for the time being and will begin decreasing the number of bonds it acquires each month later this month.

The Fed indicated that it will lower the programme by $15 billion each month for at least November and December, and that it would continue on a monthly basis depending on market developments. Clarida did not say when the Fed will hike interest rates. Nevertheless, Chicago Federal Reserve Bank President Charles Evans reiterated on Monday that the recent increase in inflation is primarily transitory and will fade as supply-side pressures are alleviated. The Fed's most dovish policymaker's mounting concerns about inflation were notable but not surprising, given that price pressures have risen well over the Fed's target of 2%.

Furthermore, Federal Reserve Governor Michelle Bowman cited a number of economic and financial stability issues posed by the housing market, including increased demand and a slow development pace, which put rising pressure on prices. Bowman did not address broader monetary policy or the economic outlook in her speech. All of these remarks from Federal Reserve members had a mixed effect on the US dollar, causing gold prices to rise. Analysts feel that gold is benefiting from the ultra-low interest rate environment as well as concerns about increased inflation.

GOLD Intraday Technical Level

Support Resistance

1817.45 1831.80

1808.45 1837.15

1803.10 1846.15

Pivot Point: 1822.80

GOLD - Technical Outlook

Gold’s bullish trend seems to get weaker below $1,827 resistance level as it has close a Doji candle below this level. On Tuesday, gold is trading choppy at $1,829 per ounce. On the bullish side, the XAU/USD’s next resistance prevails at the 1,829 level, which is extended by an upward channel. Gold has closed an upward channel on the 4-hour timeframe and that’s supporting the metal at 1,773. Considering a major difference between 1,829 – 1,773, there are multiple trading levels to consider.

For instance, gold’s immediate support prevails at the 1,807 level, which is being extended by an intraday pivot point level. A break below this level has the potential to extend the selling trend to the 1,795 and 1,785 levels. Conversely, a breakout of the 1,829 level exposes gold towards the 1,840 resistance level. Hence, the bearish bias dominates below the 1,827 level and vice versa. All the best!


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