GOLD Analysis – November 16, 2021

Gold’s Daily Price Analysis

Gold prices were closed at $1864.35 after setting a high of $1872.95 and a low of $1858.55. Gold broke its 8-day bullish streak and dropped on Monday amid the increased strength of the US dollar.

The US Dollar Index soared to its highest level since mid-July 2020 at 95.60, this eventually added strength to the US dollar and dragged gold prices lower for the day.

The main reason behind the declining prices of gold was associated with the higher US Treasury yields, which climbed to 1.63%. The yields were rising higher as investors continued to digest data from the previous session, which showed workers quitting their jobs in record numbers. According to data released on Friday, the Labor Department showed that 4.43 million Americans quit their jobs in September.

On the data front, there was not much data to be released from the US side. At 18:30 GMT, the Empire State Manufacturing Index surged to 30.9 against the anticipated 22.1 and supported the US dollar, which added to the further loss in gold prices.

Another reason behind the declining prices of precious metals was the cautious behaviour of investors assessing whether rising inflation would prompt a more aggressive response by central banks. Neel Kashkari, President of the Minneapolis Federal Reserve Bank, stated over the weekend that he expects greater inflation in the coming months but cautioned that the US central bank should not overreact to heightened inflation because it is likely to be temporary.

Moreover, the market mood was also improved on Monday with the resumed talks between the US and China to reassure that misunderstandings would not lead to unintended clashes. The talks between US President Joe Biden and their Chinese counterpart Xi Jinping lasted for about three hours. Some of the main potential topics of the meeting included the US-China trade deal and the Taiwan issue. The resumed talks between both countries triggered risk sentiment in the market as both countries' tone improved and weighed on metal prices on Monday.

GOLD Intraday Technical Level

Support Resistance

1857.61 1872.01

1850.88 1879.68

1843.21 1886.41

Pivot Point: 1865.28

GOLD - Technical Outlook

On Tuesday, the XAU/USD continued trading with a strong bullish bias at 1,873 levels right now. It’s gaining immediate support at 1,870 levels along with a pivot point support level of 1,863 levels.

On the bullish side, the breakout of a major resistance level at 1,877 exposes gold towards the next resistance levels of 1,879 and 1,884 levels. On the other hand, gold’s immediate support stays at 1,870 and 1,863 levels.

On the 4-hour timeframe, gold closed with a bullish engulfing candlestick, indicating that gold demand is strong.Therefore, gold’s bullish bias remains strong above 1,865 and vice versa. All the best!