Technical Analysis

GOLD Analysis – October 21, 2021

By LonghornFX Technical Analysis
Oct 21, 20213 min

XAU/USD Surge Above 1,779 Pivot Point

Gold prices rose as the US dollar fell, amid concerns about rising inflation and supply chain challenges that drove demand for the safe-haven commodity. Spot gold had risen 0.9 percent to $1,785.25 per ounce (1800 GMT). Gold futures in the United States for December closed 0.8 percent higher at $1,784.90 per ounce.

The dollar fell, making gold more desirable to foreign currency holders. "There is widespread anxiety about what is happening with supply constraints and the Federal Reserve's lack of action." "It appears that the Fed is lagging on inflation," said Bob Haberkorn, senior market strategist at RJO Futures. "How will equities continue to make new highs in the face of supply chain and inflation issues?" According to Haberkorn, "there is a flight to safety into gold that will continue for the next few months."

If inflation continues to rise at its present rate in the coming months, Fed Governor Christopher Waller warned on Tuesday, and officials may need to adopt "a more aggressive policy response" next year. Although reduced stimulus and interest rate hikes push up government bond yields, raising the potential cost of keeping non-yielding metal, gold is typically regarded as an inflation hedge.

In addition to helping gold, benchmark 10-year Treasury yields in the United States fell after reaching a five-month high earlier in the day.

According to StoneX analyst Rhona O'Connell, gold's range will shift once it breaches the critical $1,800 per ounce barrier, with the risk leaning to the upside ahead of India's Diwali festival and solid demand in China. In other news, platinum increased 1% to $1,050.50 per ounce. Palladium slid 1.2 percent to $2,072.71 per ounce.

Two Federal Reserve officials in the United States said on Wednesday that while asset tapering should begin soon, it was too soon to raise interest rates. Fed Governor Randal Quarles said he supports an initial effort to begin asset reductions in November 2021, but he also expressed concern about rising inflationary pressures that could necessitate a policy response.

GOLD Intraday Technical Level

Support Resistance

1756.81 1787.01

1744.08 1807.48

1724.61 1819.21

Pivot Point: 1779.28

GOLD - Technical Outlook

Gold’s technical analysis is still mostly unchanged as the market’s focus remains on Bitcoin and the Bitcoin ETF. Thus, gold continues to trade bullish and is now priced at $1,782 per ounce. The technical side of gold suggests a strong bullish bias. The RSI is still holding above 50 and it’s suggesting a bullish trend in XAU/USD on a 4-hour timeframe.

The daily pivot point level is supporting gold at 1,779, and a breach of that level exposes the metal until the levels of 1,769 and 1,757.On the flip side, gold’s major resistance stays at 1,788 and a bullish crossover of this exposes the metal until the 1,800 level. All the best!


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