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Technical Analysis

GOLD Analysis – September 14, 2021

Pivot Point Level to Support Gold at $1,793

After hitting a high of $1800.05 and a low of $1785.10, gold prices settled at $1794.55. Gold prices were sluggish as the US dollar remained strong, and investors awaited data on US consumer prices, which are due this week. This data drew investors’ attention since it could influence the Fed’s judgment on when to begin withdrawing its support measures.

During early trading hours on Monday, the US Dollar Index hit 92.89, its highest level since August 27th, but it couldn’t stay there for long, falling to 92.6. This in turn, placed downward pressure on the greenback. The 10-year Treasury yield decreased to 1.31 percent, putting more pressure on the US dollar. The weakening of the US dollar boosted gold prices, which recouped some of their Monday losses.

On the statistics front, the Federal Budget Balance in August showed a deficit of -170.6 billion dollars, vs. an anticipated -260.5 billion dollars, weighing on the US dollar and adding to gold price gains.

The CPI figure for August is the focus of this week’s market calendar. Experts ponder whether the inflation increase will subside this year, as the Federal Reserve claims. The CPI statistics for the United States are scheduled on Tuesday, and it is projected to come in at 5.3 percent. The CPI increased slower in July, although it remained at a 13-year high of 5.4 percent.

The Federal Reserve is gearing up for its September policy meeting, and it’s primarily focused on August’s CPI statistics to have a clear understanding of how to reduce stimulus. As the economy has picked up speed, the subject of whether the Fed should taper its stimulus and raise interest rates has been argued for months, but the emergence of the Delta strain of coronavirus has conflicted with the idea of tapering.

Meanwhile, Loretta Mester, the president of the Cleveland Federal Reserve, stated on Friday that she still wants the central bank to begin tapering asset purchases this year. She’s joining a group of policymakers who indicated that their plans to start reducing support were not hampered by weaker job growth in August. These remarks boosted the value of the US dollar and capped further advances in gold prices.

GOLD Intraday Technical Level

Support Resistance
1786.41 1801.36
1778.28 1808.18
1771.46 1816.31
Pivot Point: 1793.23

GOLD – Technical Outlook

The technical side of gold hasn’t changed and it’s follow the same trading levels as discussed in Monday’s report. Gold is trading with a neutral bias, holding above a pivot point trading level of 1,793. Gold, on the other hand, is expected to find immediate support near 1,782. The breakout at the 1,782 level exposes gold price towards next support level of 1,776, and below this, the next support will prevail around the 1,765 level.

The pair’s immediate resistance stays at the 1,792 level. In the event of a bullish breakout, gold prices will be exposed to the 1,798 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 1,792 suggests a bearish bias in the precious metal gold. Lastly, the RSI indicates a bearish bias in gold. Thus, gold’s bearish bias remains strong below the 1,794 level and vice versa. All the best!