Gold – XAU/USD Analysis - May 11, 2021

Ascednign Triangle Breakout

Gold prices were closed at $1836.85 after placing a high of $1846.15 and a low of $1830.60. On Monday, gold held firm near a three-month high after dismal U.S. jobs growth number kept the dollar under pressure and raised expectations that interest rates will remain low for some time.

On Friday, the U.S. nonfarm payroll data disappointed the investors after it showed unexpectedly slow job growth in April and pushed the dollar down towards a 2-month lowest level, and made gold more appealing for the holders of other currencies.

The hopes of investors’ that the world’s largest economy might start recovering soon and that the U.S. Federal Reserve will start tightening the policy earlier than expected faded away after the lower-than-expected U.S. jobs growth in April.

On Monday, U.S. President Joe Biden urged employers to help get more of their workers vaccinated as it would boost the economy. Biden also touted the upcoming $350 billion in federal aid to state and local governments to help more parents get child care and return to work.

Biden also said that the ransomware attack that led to the shutdown of the Colonial Pipeline was a criminal act and vowed that his administration would take this matter very seriously.

Meanwhile, the Chicago Federal Reserve Bank President Charles Evans said on Monday that the Fed officials would like to see higher inflation, more wage growth, and several months of strong employment gains averaging 1 million jobs added before considering adjusting monetary policy. Evans said that it was a little more complicated as the economy has been restarted and many sectors were experiencing growing pains. He hoped that the slow job growth in April was just a one-month kind of thing and that the employment will be better after-wards.

There was no macroeconomic data released on Monday from the U.S., and the U.S. Dollar Index (DXY) that measures the value of the greenback against the basket of six major currencies rose a little on Monday and reached a $90.34 level. The U.S. Treasury yields on a 10-year note also reached above 1.60% and supported the U.S. dollar that kept gold prices under pressure. Gold remained flat throughout the trading session on Monday and failed to give any significant move to its investors.

Gold Intraday Technical Level

Support Resistance

1833.51 1838.86

1830.13 1840.83

1828.16 1844.21

Pivot Point: 1835.48

Gold - XAU/USD - Technical Outlook

Technical side of gold hans’t changed a lot as it continues trading with bullish bias at 1,837 level, having disrupted an ascending triangle pattern on the daily chart. On the higher side, the violation of the 1,800 level has triggered a robust dramatic buying trend in gold; therefore, the precious metal is heading towards the next resistance level of 1,856 level. The precious metal has closed three white soldiers pattern that's keeping gold's trading sentiment strongly bullish on the daily timeframe. The EMA and RSI are in support of a buying trend today. Gold's next resistance stays at 1,840 and 1,856, while the support remains at 1,833 and 1,819 levels. All the best!