GOLD Analysis – November 22, 2021

Gold’s Daily Price Analysis

Gold prices recovered on Monday after falling to their lowest level in over two weeks as the dollar fell, lending some support to the commodity. The dollar index slipped 0.1 percent from its high on Friday. A weakening dollar lowers the cost of bullion for buyers holding other currencies. Gold prices ended the day at $1851.60, with a high of $1868.10 and a low of $1844.20. In contrast, US Treasury Yields on the benchmark 10-year note fell on Friday, extending their drop for the third consecutive day to as low as 1.51 percent.

On Tuesday, Federal Reserve Governor Christopher Waller stated that the Fed should accelerate its decrease in asset purchases to have more flexibility to raise interest rates from near-zero levels sooner than expected if high inflation and strong job increases continue. He stated that due to the quick recovery in the labour market and the weakening inflation figures, he favoured a faster tapering pace and more rapid accommodation removal in 2022.

Furthermore, Federal Reserve Vice Chair Richard Clarida stated that central banks in different nations could benefit from sharing analysis and pursue similar policies in reaction to common global shocks. He emphasized that central banks are not immune to each other's policies and that not only do changes in US policy affect foreign economies, but monetary policy moves in other nations can also affect the US economy and necessitate a Fed response. Meanwhile, Mary Daly, President of the San Francisco Federal Reserve Bank, stated that the Fed had decreased its asset purchases. She went on to say that the Fed's next focus should be on the communications it can provide about the future course of rate hikes.

Federal Reserve regulators are publicly discussing whether to accelerate the tapering of asset purchases, with one of the central bank's most powerful executives signalling on Friday that the proposal will be discussed at the Fed's next meeting.

A rise in interest rates should lessen the appeal of bullion, as higher rates increase the opportunity cost of the non-interest-bearing metal. The White House stated that more information on President Joe Biden's candidate for the next Fed chairman would be released early this week.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, reported a 0.8 percent increase in holdings to 985 tonnes on Friday, up from 976.87 tonnes on Thursday. Physical gold demand in major Asian markets slowed last week, as Indian traders expected fresh interest in metal due to the forthcoming wedding season.

GOLD Intraday Technical Level

Support Resistance

1841.25 1849.80

1836.30 1853.40

1832.70 1858.35

Pivot Point: 1844.85

GOLD - Technical Outlook

On Monday, the precious metal gold was trading at $1,841 per ounce, with immediate support at $1,842 per ounce. On the bullish side, the XAU/USD is heading towards the next resistance level of 1,851. An intraday pivot point extends this resistance level. The closing of candles below 1,851 signals a selling bias in gold. As a result, the major support level remains at 1,842, and a break below this level exposes the gold price to 1,837 and 1,828 levels.

On the 4-hour chart, the XAU/USD has violated the symmetrical triangle pattern at the 1,851 level. Typically, the violation of such a pattern signals the continuation of a selling trend. Since the RSI and stochastic entered the oversold zone, gold investors have triggered a bullish correction above the 1,842 level. Today, the trader’s focus stays at the 1,851 level as gold’s selling bias dominates below this and vice versa. All the best!