Psychological Level of Resistance: 1,782
Gold prices ended the day at $1796.55, having reached a high of $1801.75 and a low of $1787.5. Gold rose for the third day in a row on Thursday, despite a drop in the U.S. dollar and Treasury yields. During early trading hours, the U.S. Dollar Index, which gauges the dollar's value against a basket of 6 main currencies, dipped to 93.76.
It retreated, though, and recovered some of its losses to conclude the day at 94.04. Treasury rates on benchmark 10-year U.S. notes fell to as low as 1.50 percent on Thursday, the third straight day of decreases. The weakening of the U.S. dollar, combined with a falling yield, put additional pressure on the U.S. currency, driving gold higher for the third straight session on Thursday.
The U.S. dollar was under pressure following the announcement of poor producer price index data from the U.S. on Thursday. However, the greenback gained some support with the announcement of jobless claims, as the country experienced a dip in the number of claims filed for jobless benefits last week, signalling growth in the employment sector.
At 17:30 GMT, the September Producer Price Index fell to 0.5 percent, vs. the predicted 0.6 percent, weighing on the U.S. dollar and adding to gold price rises. The Core PPI fell to 0.2 percent in September vs. the projected 0.5 percent, weighing on the U.S. dollar, which lifted gold higher on Thursday. Last week's U.S. unemployment claims declined to 293K from 315K expected, supporting the U.S. dollar and limiting additional higher momentum in yellow metal prices.
On the other hand, gold was backed by broader market sentiment, which had shifted to the downside during the global oil crisis and rising prices worldwide. The safe-haven gold gained higher on Thursday as risk-off market sentiment drove it higher. Moreover, Federal Reserve Governor Michelle Bowman stated that she would be delighted with the U.S. central bank beginning to reduce some of its crisis-era support for the economy as early as next month. This bolstered the U.S. currency and halted further advances in gold prices.
GOLD Intraday Technical Level
Support Resistance
1788.81 1803.01
1781.08 1809.48
1774.61 1817.21
Pivot Point: 1795.28
GOLD - Technical Outlook
Gold continues to trade bullish and is now priced at $1,794 per ounce. However, the technical side of gold is mostly unchanged and still signals a bullish bias. Gold is approaching overbought territory as it’s RSI was well above 80 on a 4-hour timeframe, indicating that it was overbought. However, it has begun to move out of the zone. Typically, it signals the initiation of a bearish retracement.
The 1,788 level, on the other hand, is gold's immediate support. If the 1,788 level is broken, a sell-off might ensue till the 1,780 and 1,774 levels are reached. On the upside, gold's following resistance levels remain at 1,800 and 1,808, respectively.
We might anticipate a bearish correction in bullion on Friday, particularly below the 1,800 mark. Gold bullish bais dominates over 1,788 and vice versa. All the best!
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