GOLD Analysis – September 09, 2021

Bullish Greenback Continues to Weight on Gold

After hitting a high of $1804.40 and a low of $1783.10, gold prices settled at $1793.50. Due to the strengthening of the US dollar, gold has lost ground for the fourth consecutive session. Moreover, it has lost ground for the fourth straight session. On Wednesday, the US Dollar Index, which measures the dollar's value against a basket of six major currencies, rose for the second straight day, reaching 92.86. On the other hand, 10-year Treasury yields were unchanged at 1.32 percent on Wednesday.

On the statistics front, JOLTS Job Openings jumped to 10.93 million in July against an estimate of 10.03 million at 19:00 GMT, supporting the US dollar and pushing gold prices lower. The IBD/TIPP Economic Optimism for September fell to 48.5 from 55.3 expected at 19:02 GMT, weighing on the US dollar and causing more losses in gold prices.

Even if the job market increases at an uninspired pace in the following month, President of the New York Federal Reserve Bank, Jon C. Williams, said on Wednesday that the central bank would be able to start cutting support for the economy before the end of the year.

He went on to say that he had been looking at the cumulative amount of job growth rather than monthly variations and that slowing job growth would not necessarily rule out a start to the so-called tapering process. He also stated that reducing asset purchases will be the first step in decreasing assistance and that the Fed's policy interest rate will remain at zero for some time.

The dollar gained strength due to Fed President Williams' comments, in which he hinted at tapering. Investors praised Williams' comments since they had been waiting for any hint of tapering for a long time, and the greenback rose, driving gold lower. Meanwhile, yellow metal's losses were limited because of market concerns about a worldwide downturn, which weighed on the market's risk sentiment.

Rising coronavirus infections in the United States hampered employment growth in the United States last month, prompting speculation that the Fed will postpone tapering. These concerns continued to bolster gold prices, preventing further declines.

In addition, the market's attention has been drawn to the upcoming European Central Bank meeting, where policymakers are likely to decide on cutting PEPP purchases. For the rest of the day, this kept gold prices under pressure.

GOLD Intraday Technical Level

Support Resistance

1782.94 1804.24

1772.37 1814.97

1761.64 1825.54

Pivot Point: 1793.67

GOLD - Technical Outlook

The precious metal gold is trading with a bearish bias, holding below a pivot point trading level of 1,791. Gold, on the other hand, is expected to find immediate support near 1780. The breakout at the 1,780 level is likely to extend a selling trend until the next support level of 1771, and below this, the next support will prevail around the 1,760 level.

The pair's immediate resistance stays at the 1,791 level, which is being extended by the intraday pivot point level. In the event of a bullish breakout, gold prices will be exposed to the 1,800 level, with the next resistance located around the 1,811 level. In the 4-hour time frame, the 50-period exponential moving average is likely to extend resistance around the 1,811 level.

The closing of candles below this level suggests a selling bias in the precious metal, gold. Take a look at the leading technical indicator, RSI. It simply indicates that there is a strong selling bias in the precious metal gold today. On Thursday, gold's bearish bias remains strong below 1,791 level and vice versa. All the best!