Technical Analysis

GOLD Analysis – October 29, 2021

By LonghornFX Technical Analysis
Oct 29, 20213 min

Pivot Point Extend Resistance at 1,802

Gold prices concluded at $1801.15 per ounce, having reached a top of $1812.65 and a low of $1793.55. Gold's gains were extended, although it remained in a consolidation mode during Thursday's trading session. The US Dollar Index dropped as low as 93.28, its lowest level since September 27th.

The US Treasury yield on a 10-year reversed course on Thursday, breaking a four-day bearish trend to reach 1.58 percent. Yellow metal prices rose as the US dollar fell, and statistics showed that the US economy grew slowly for the first time in more than a year.

On the statistics front, at 17:30 GMT, the Advance GDP for the quarter fell to 2.0 percent, compared to the predicted 2.6 percent, weighing on the US dollar and driving gold higher. For the third quarter, the Advanced GDP Price Index increased to 5.7 percent, up from 5.3 percent projected, supporting the US dollar and limiting further advances in precious metal prices.

Last week's jobless claims fell to 218K, versus an anticipated 290K, bolstering the US currency and limiting the surge in gold prices. Pending Home Sales fell to -2.3 percent at 19:00 GMT, compared to the projected 0.4 percent, weighing on the US dollar and pushing gold prices higher.

The US GDP expanded at a 2.0 percent annualized rate last quarter, despite a rebound in COVID-19 cases, which further stretched global supply chains and resulted in a shortage of items like autos, slamming the brakes on consumers spending. Following this news release, the US dollar declined by 0.6 percent against its competing currencies, pushing gold higher as the dollar and gold moved in opposite directions.

Market participants' attention has switched to the US Federal Reserve meeting, set for November 2-3, 2011. The strategy is expected to have a considerable impact on gold prices, as Chairman Jerome Powell has stated that the moment to reduce bond purchases is approaching.

GOLD Intraday Technical Level

Support Resistance

1792.25 1811.35

1783.35 1821.55

1773.15 1830.45

Pivot Point: 1802.45

GOLD - Technical Outlook

Gold is trading with a bearish bias at $1,795 per ounce, having fallen below an intraday pivot point resistance level of 1,802. The closure of candles below the 1,802 level adds to gold's selling pressure. The metal's immediate support remains at the 1,782 level, and a breach of this level exposes its price to the 1,768 level.

The formation of a bearish engulfing candle followed by shooting star candles suggests a solid selling bias among investors. Alongside, the MACD is supporting a selling bias in gold. Therefore, the bearish bias dominates below 1,810 and vice versa. Lastly, investors may keep an eye on 1,782 as it’s going to work as a strong support today. All the best!


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