Technical Analysis

GOLD Analysis – November 25, 2021

Gold’s Daily Price Analysis

Gold prices were closed at $1789.80 after setting a high of $1796.25 and a low of $1778.10. Gold continued its bearish momentum and dropped for the fifth consecutive session on Wednesday amid the rising price of the US dollar. The US dollar was strong across the market on Wednesday, despite mixed macroeconomic data released on the day. The DXY surged for the fourth session in a row, reaching its highest level since July 2020 at 96.94.whereas the benchmark 10-year Treasury yield fell on Wednesday to 1.62% from a daily high of 1.69%.

The reduced GDP of the US drove the decline in US Treasury yields for the previous quarter. However, the decline was limited as unemployment claims came in favour of the local currency. The mixed macroeconomic data kept the losses in gold prices limited for the day.

At 18:30 GMT, the prelim GDP for the quarter dropped to 2.1%, against the forecasted 2.2%, and weighed on the US dollar, which led to a further loss in gold prices. The core durable goods orders remained flat with expectations of 0.5%. The Durable Goods Orders dropped to -0.5% against the expected 0.2% and weighed on the US dollar, which capped further losses in gold prices. Yellow metal prices fell further to the downside after last week’s unemployment claims were reduced to 199K from the expected 259K, adding strength to the US dollar and dragging yellow metal lower.

The US trade balance showed a deficit of $82.9 billion against a forecasted $94.9 billion, which supported the US dollar and limited the downfall in precious metals. The Prelim GDP Price Index for the quarter surged to 5.9% against the projected 5.7% and supported the US dollar, which dragged gold prices further to the downside. Preliminary wholesale inventories surged to 2.2% against an estimated 1.0% and weighed on the US dollar, which capitulated further losses in gold prices. At 20:00 GMT, the Core PCE Price Index remained flat with expectations of 0.4%.

The Revised UoM Consumer Sentiment surged to 67.4 against the forecasted 66.8 and supported the US dollar, which added to further losses in gold prices. The new home sales declined to 745K from the predicted 801K and weighed on the US dollar, limiting the declining gold prices. Personal income surged by 0.5%, against the expected 0.2%, and supported the US dollar, which added to the further loss in gold. Personal spending also surged to 1.3%, against the predicted 1.0%, and supported the US dollar, which added to the further decline in gold prices. The revised UoM inflation expectations remained unchanged at 4.9%.

Meanwhile, the losses in precious metals were also limited on Wednesday after the World Health Organization (WHO) said in a report that the global COVID-19 death toll was up by 6% in the past week. The report from the WHO suggested that almost 3.6 million people were infected during the last week, of which 51,000 died.

GOLD Intraday Technical Level

Support Resistance
1778.09 1808.79
1764.57 1825.97
1747.39 1839.49
Pivot Point: 1795.27

GOLD – Technical Outlook

Gold is trading at 1,794 with a bearish bias. The metal has already breached a firm support level of 1,803, which currently acts as a gold barrier. On the bullish side, gold’s major resistance stays at 1,795, which is extended by a pivot point level. The break above this level exposes gold prices towards the 1,807 and 1,824 levels. The RSI has entered the oversold zone.

On the downside, gold’s immediate support is at 1,783, and a break below that level can push the gold price towards 1,760. The 20 and 50 days EMAs also indicate a selling bias below the 1,793 level; so, downtrend dominates below 1,795 and vice versa. All the best!