GOLD Analysis – November 17, 2021

Gold’s Daily Price Analysis

Gold prices closed at $1851.90 after setting a high of $1879.35 and a low of $1851.00. Gold plunged for the second consecutive session on the back of the US dollar rally. The US Dollar Index continued its bullish momentum and surged for another day to reach the 95.98 level, which added strength to the US dollar and dragged yellow metal prices to the downside.

The US Treasury Yield on the benchmark 10-year note also continued to rise towards 1.65%, assisting the greenback in gaining further strength in the market, which eventually weighed over the precious metal on Tuesday. The US dollar gathered strength against other rival currencies after the US macroeconomic data favored the local currency.

At 18:30 GMT, the Core Retail Sales for October surged to 1.7% against the forecasted 1.0% and supported the US dollar. That added further pressure on gold prices. The retail sales also increased to 1.7% versus the anticipated 1.3% and supported the US dollar, which dragged gold prices further to the downside. Import prices in October also rose to 1.2% against the forecasted 1.0% and supported the US dollar, ultimately dragging gold prices to the downside.

At 19:15 GMT, industrial production increased to 1.6%, versus the expected 0.9%, supporting the greenback and adding to gold price losses. The capacity utilization rate soared to 76.4%, up from 75.9% expected, adding strength to the US dollar and keeping gold prices on the downside. At 20:00 GMT, business inventories increased by 0.7% against the predicted 0.6% and weighed on the US dollar, gold prices. The NAHB Housing Market Index surged to 83 against the forecasted 80 and supported the US dollar, which ultimately added to the further decline in precious metals.

Furthermore, on Tuesday, President Joe Biden signed his hard-fought $1 trillion infrastructure deal into law. The President hoped to use the infrastructure law to build back his popularity, which has hit amid rising inflation and the inability to thoroughly shake the public health and economic risks from COVID-19. This news also added strength to the US dollar, which dragged gold prices to the downside.

Gold was higher last week amid high inflation fears and rose for about seven consecutive sessions. However, gold started this week with minor losses triggered by profit-taking and a correction.

GOLD Intraday Technical Level

Support Resistance

1842.15 1870.50

1832.40 1889.10

1813.80 1898.85

Pivot Point: 1860.75

GOLD - Technical Outlook

On Wednesday, the XAU/USD is trading at the 1,854 level, dropping below the pivot point level of 1,858. For now, it’s gaining immediate support at the 1,849 level and any violation of this exposes the metal towards the 1,849, 1,840, and 1,831 levels.

On the bullish side, the major resistance stays at the 1,858 level and a bullish breakout of that level exposes the metal towards the 1,868 and 1,877 resistance levels.

The RSI and stochastics suggest a mixed bias as the RSI holds in a sell zone, while the stochastics stays above 50 and supports a bullish bias. Therefore, gold is consolidating in a narrow trading range of 1,858 – 1,849 levels. All the best!