GOLD Analysis – November 18, 2021

Gold’s Daily Price Analysis

Gold prices were closed at $1868.85 after setting a high of $1870.40 and a low of $1851.15. The XAU/USD reversed course and surged on Wednesday despite the strength of the US dollar and better-than-expected US retail sales data. Gold prices bounced back from two days of losses to close at their highest levels since June 2021, giving hope to the market that gold was on its way to recapturing the $1900 level. Many analysts believe that higher inflationary pressures in the market were the underlying support for gold and other precious metals such as silver.

Even though the US Dollar Index, which measures the value of the greenback against a basket of six major currencies, rose during early trading hours to its highest level since July 2020 at 96.24, the DXY could not stay there for long and began to fall, owing primarily to profit-taking and a correction, and failed to reach 95.83. The unexpected sell-off in DXY created a negative momentum in the greenback, which ultimately supported rising precious metals prices. Meanwhile, US Treasury yields on the benchmark 10-year note fell on Wednesday after rising for two consecutive sessions and reaching 1.58%, adding to the greenback's negative impression and helping gold remain stronger for the day.

On the data front, at 02:00 GMT, the TIC Long-Term Purchases dropped to 26.3B against the forecasted 64.1B and weighed on the US dollar, which ultimately added strength to the yellow metal prices. At 18:30 GMT, the number of building permits remained unchanged at 1.63 million, as expected. Housing starts fell to 1.52 million from 1.58 million expected, weighing on the US dollar and adding to the precious metal's strength.

On Tuesday, San Francisco Federal Reserve Bank President Mary Daly said that the Fed had started tapering its asset purchases. She said that the next step was to start communication about the future path of rate hikes. Market participants largely ignored these comments, and the US dollar continued to fall during the correction, allowing gold to gain market strength.

Furthermore, the rising number of coronavirus cases also added to the concerns in the market and started pushing gold higher on safe-haven bets. On Wednesday, France registered more than 20,000 new confirmed coronavirus infections for the first time since August 25 as the fifth wave of the epidemic picked up speed.

In Northern Ireland, twelve COVID-19 related deaths have been reported, and since the start of the pandemic, 2814 deaths have been recorded in the region. The beginning of the winter season has also raised concerns about the spread of coronavirus, which ultimately called for safe-haven bets and provided strength to the precious metal.

GOLD Intraday Technical Level

Support Resistance

1856.54 1875.79

1844.22 1882.72

1837.29 1895.04

Pivot Point: 1863.47

GOLD - Technical Outlook

On Thursday, the precious metal gold is trading at the 1,865 level, holding above the pivot point level of 1,863. For now, it’s gaining immediate support at the 1,863 level and violation of this exposes the metal towards the 1,855, 1,849, and 1,843 levels.

On the bullish side, the major resistance stays at the 1,868 level and a bullish breakout of that level exposes the metal towards the 1,873 and 1,880 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 staying bullish above 1,861 level. All the best!