Gold – XAU/USD Analysis – June 21, 2021

Gold Completes 61.8% Fibonacci Retracement!

Gold closed at $1769.00 after placing a high of $1797.90 and a low of $1761.20. Gold extended its loss and continued its bearish streak for the 6th consecutive session and dropped to its lowest level since 28th April. The worst week suffered by gold since the coronavirus outbreak of 2020. The prices dropped almost 6% amid the accelerated timetable from the Federal Reserve for hiking interest rates and tapering stimulus measures.

On Wednesday, the Federal Reserve signaled at its monthly policy meeting that it would raise interest rates at least twice by the end of 2023 to 0.6% from the current level of 0.25%. The central bank also said that it was monitoring data to determine when to start tapering its monthly asset purchase of $120 billion. Since the coronavirus outbreak last year, the Federal Reserve has purchased at least $80 billion in Treasury bonds and $40 billion in mortgage bonds to support the economy and the credit markets.

The rate hike expectations and declining commodities prices added strength to the U.S. dollar and pushed it towards high monthly levels. On Friday, the U.S. Dollar Index jumped and reached $92.40, its highest since 9th April after rising for six consecutive sessions. At the same time, the U.S. Treasury Yields on 10-year Note fell to 1.43%.

Furthermore, the gold prices were also declining due to the latest comments from St. Louis President James Bullard. He said on Friday that the central bank might have to consider increasing interest rates by next year instead of 2023 as inflation could run ahead of its predictions. These comments from Bullard added pressure on yellow metal prices and dragged them downward.

Meanwhile, according to Johns Hopkins University, the overall global coronavirus caseload has topped 177.7 Million, and the deaths have risen to more than 3.84 Million. The U.S. continued to be the worst-hit country with the world’s highest number of cases and deaths. India followed the U.S. and topped on the second rank in terms of infections. The other worst-hit countries include Brazil, France, Turkey, Russia, U.K., Italy, and Argentina. Despite the vaccination rollout, the rising number of cases across the globe gave some support to the declining prices of yellow metal and capped further loss on Friday.

Gold Intraday Technical Level

Support Resistance

1764.80 1772.05

1760.25 1774.75

1757.55 1779.30

Pivot Point: 1767.50

Gold - XAU/USD - Technical Outlook

On Monday, the precious metal gold is trading at a 1,777 level, having bounced off over 1,765 support levels. We can see precious metal has completed 61.8% Fibonacci retracement at 1,765 levels, and closing the daily candle suggests that bullish correction is coming ahead. On the daily timeframe, the Fibonacci indicator is offering resistance levels of 1,795 and 1,822 that marks 23.6% and 38.2% Fibonacci retracement levels. The MACD is showing a bearish crossover, indicating the overall trend is still looking bearish. The 50 periods EMA is holding at 1,822 level, indicating a bearish trend. Since the current market price of gold is far away from EMA, the odds of bullish correction remain high. Gold's support level stays at 1,769 and 1,750 levels. All the best!