Technical Analysis

GOLD Analysis – September 17, 2021

By LonghornFX Technical Analysis
Sep 17, 20213 min

Gold to Exhibit Bullish Retracement

After hitting a top of $1797.25 and a low of $1745.55, gold prices settled at $1754.15 per ounce. On the back of a firmer US dollar and higher US Treasury Yields, gold lost ground for the second straight session on Thursday, falling to its lowest level since August 12.

With better-than-expected Retail Sales figures released on Thursday, the greenback was strong across the board. The DXY rose to 92.96 on Thursday, putting pressure on the precious metal. The benchmark 10-year Treasury yield climbed higher for the second straight day, reaching 1.35 percent, adding to the greenback's gains and dragging precious metal further to the south.

On the statistics front, at 17:30 GMT, Core Retail Sales for August jumped to 1.8 percent, above expectations of -0.1 percent, bolstering the US currency and dragging gold prices lower. Retail Sales increased by 0.7 percent in August, compared to a forecast of -0.7 percent, supporting the US dollar and adding to gold's losses. In September, the Philadelphia Fed Manufacturing Index rose to 30.7 from 18.9 in August, bolstering the US dollar and adding to gold's negative momentum.

Last week's Unemployment Claims increased to 332K from 325K expected, putting pressure on the US dollar, which led to more losses in the yellow metal. Business Inventories were unchanged at 19:00 GMT, against predictions of a 0.5 percent increase.

On the back of reignited expectations for quicker tapering by the US Federal Reserve, the dollar climbed significantly in August, holding near its 3-week high against a basket of major currencies.

The attention of the market has switched to the two-day policy meeting on September 21 and 22. Investors are expecting signs from the Fed about when the US central bank would begin to remove its asset purchases. These prospects continued to strengthen US Treasury Yields, which in turn increased the opportunity cost of owning non-yielding bullion, causing the precious metal to fall on Thursday.

Furthermore, many members of the Federal Reserve were in favor of reducing economic stimulus measures this year, and as a result, the outlook for gold has deteriorated. Despite higher-than-expected initial unemployment claims last week, the US dollar stayed strong on the back of the Fed's plan to taper more than anything else.

GOLD Intraday Technical Level

Support Resistance

1734.05 1785.75

1713.95 1817.35

1682.35 1837.45

Pivot Point: 1765.65

GOLD - Technical Outlook

On Friday, the precious metal gold has bounced off about the support level of 1,745, and now it's heading towards an intraday pivot point level of 1,764. Furthermore, a bullish breakout of 1,764 levels exposes gold prices towards the next resistance level of 1,784. Moreover, gold me find next resistance at 1,795 level.

On the support side, the breakout of 1,746 support exposes gold prices towards 1,733 and 1,714 levels. The RSI and Stochastic indicators are in the oversold zone, and typically this can drive a bullish correction in the gold price. Overall, gold's bullish bias dominates over 1,765 and vice versa. All the best!


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