Technical Analysis

GOLD Analysis – October 27, 2021

By LonghornFX Technical Analysis
Oct 27, 20213 min

Pivot Point Extend Resistance at 1,794

On Wednesday, gold prices closed at $1794.95 after reaching a high of $1809.25 and a low of $1783.05. Gold reversed its trend on Tuesday as the US dollar strengthened. The US dollar index climbed and extended its gains on Tuesday to 94.02, putting additional pressure on gold prices. On the other hand, 10-year Treasury yields fell to 1.60 percent on Tuesday, restricting further drops in gold prices.

Gold prices fell more than 1% on Tuesday, snapping a five-session bullish trend, as the US dollar rose and market risk appetite soared. Stronger-than-expected earnings from technology companies lifted the benchmark 500 index to a new high during Tuesday's trading session, taking the lustre off safe-haven gold.

On the data front, the House Price Index for August fell to 1.0 percent, versus the projected 1.5 percent, weighing on the US dollar, which pushed on further falls in gold prices around 18:00 GMT. The S&P/CS Composite-20 HPI dipped to 19.7 percent for the year, down from the predicted 20.1 percent, dragging on the US dollar and restricting the drop in gold prices. In October, at 18:59 GMT, the Richmond Manufacturing Index jumped to 12 versus the projected four, bolstering the US dollar and putting additional pressure on gold.

At 19:00 GMT, the CB Consumer Confidence increased to 113.8, up from 108.4, supporting the US dollar. This ultimately contributed to additional declines in gold prices. The surge in new home sales to 800,000 in September, compared the predicted 755K, bolstered the US dollar, forcing gold prices to fall even lower.

The next Federal Reserve policy meeting in the United States is slated for next week, and traders are betting that the Fed will slow the pace of asset purchases initiated to mitigate the effects of pandemics on society. Investors expected the Fed to halt asset purchases because consistently high inflation levels have shown to be non-transitory, as previously predicted. Because of these assumptions, the US dollar rose and gold fell for the day.

GOLD Intraday Technical Level

Support Resistance

1781.00 1807.80

1768.60 1822.20

1754.20 1834.60

Pivot Point: 1795.40

GOLD - Technical Outlook

Gold is trading with a bearish bias at $1,789 per ounce, having dropped below an intraday pivot point resistance level of 1,794. The closing of candles below the 1,794 level adds selling pressure on gold. The metal’s immediate support stays at the 1,782 level, and violation of this exposes its price towards the 1,768 level.

Gold has recently closed bearish engulfing candles below the pivot point resistance level of 1,794, which is supporting the selling bias in gold. However, the upward trendline is supporting gold at 1,782 levels on the 4-hour timeframe. Thus, the 1,782 level is very significant for gold investors. "Bullyish bias dominates over 1,782 and vice versa. All the best


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