GOLD Analysis – September 07, 2021

XAU/USD Breaking Below Intraday Pivot Point

After hitting a top of $1830.65 and a low of $1823.65, gold prices settled at $1825.65. Owing to the absence of U.S. investors due to the Bank Holiday, gold reversed course and suffered correction pressure on Monday, turning red for the day.

Gold fell on Monday, but it was still at a two-and-a-half-month high, as the U.S. Dollar Index gained momentum versus its rival currencies and turned green for the day after a seven-day losing streak. On Monday, the DXY rose to 92.3, recouping some of its recent losses and putting pressure on gold.

Following the release of U.S. Non-Farm Payrolls data last week, the dollar was under pressure amid hopes that the Federal Reserve would take its time unwinding economic support measures. Because the U.S. market was closed on Monday due to a holiday, the lower trading volume kept gold price losses to a minimum for the day. The precious metal held firm for the day as Fed Chair Jerome Powell's denial shattered investors' expectations for Fed tapering. The Fed has set strong job growth as a yardstick for starting to withdraw economic stimulus measures. Thus the disappointing Labor statistics last week added selling pressure to the currency.

Dr. Anthony Fauci, the top U.S. health expert, stated on Monday that in the United States, coronavirus booster shots would most likely start with Pfizer and BioNTech's vaccine, while Moderna shots may be postponed.

On the other hand, White House Chief of Staff Ron Klain chastised the Biden administration for pushing booster shots ahead of scientific data. These developments also supported the U.S. currency, putting downward pressure on gold prices. Furthermore, on Monday, the global case count of coronavirus infections topped 220.4 million, with 4.5 million deaths reported worldwide. Meanwhile, about 5.46 billion doses of vaccine shots have been provided globally, but the Delta version continues to proliferate at a quicker rate with no signs of slowing down.

Investors' emphasis this week will be on the release of the US PPI report, which is set to be released on Friday and is projected to decline to 0.6 percent from the previous 1.0 percent. Any figure higher than 0.6 percent might boost the U.S. dollar and push gold prices lower, while any figure lower than that could weigh on the U.S. currency and push gold prices higher.

GOLD Intraday Technical Level

Support Resistance

1822.65 1829.65

1819.65 1833.65

1815.65 1836.65

Pivot Point: 1826.65

GOLD - Technical Outlook 

On Tuesday, the precious metal gold started coming out of the wide trading range of 1,833 – 1,823 level. The bearish bias seems to dominate the market. Gold’s immediate resistance stays at 1,824, which marks the intraday pivot point level. A bullish breakout of this resistance level exposes the precious metal gold price towards the 1,828 and 1,833 levels.

On the support side, gold’s immediate support prevails around 1,816 and 1,810 levels. While the Stochastic also suggests a selling trend in gold. Furter breakout of the 1,810 level exposes the metal towards the 1,801 level. All the best!