The document discusses factors that may influence gold prices going forward. It notes that talk of the Fed tapering stimulus could cause gold prices to fall as economies recover from COVID-19. However, gold bulls argue that post-pandemic economies will still be weak and may require more quantitative easing, providing support for gold. Technically, gold has broken out of a trading range but faces resistance around $1818 and will likely remain volatile as markets await comments from Fed Chair Powell on inflation and monetary policy.

1. Is Gold Weakness Set To Stay

2. Points To Be Covered Today:
• Gold To Fall On Talk Of Fed Tapering
• Is Gold Weakness Set To Stay
• Lunar New Year Celebrations
• The Case For Gold Bears & Gold Bulls
• The Takeaway
• Gold Technical & Fundamental Overview
• Gold Price: Key Levels To Watch
• XAU/USD Technicals Support Prospects For Additional Gains
• Gold Price & Chart

3. Gold To Fall On Talk Of Fed Tapering
• The globe will soon be preparing to exit COVID-19 stimulus packages as long as the
vaccine works as intended.
• This should result in a more optimistic perspective for central banks, including the
Fed.
• My take is that the recovery could be very swift when it comes and the Fed will most
likely find themselves talking about tapering sooner that Dec 2021.
• One interesting tell for me is that the two largest periods of losses in gold have
come on the Pfizer vaccine news and the tapering talk. This indicates to me that the
directional bias is to the downside the stronger the global recovery is.
• The key will be the speed to which tapering is spoken about with gold likely to fall
on talk of Fed tapering.

4. Lunar New Year Celebrations
• Gold normally has a great start to the year on Chinese gold buying for the
Lunar New year celebrations.
• In fact, over the last 10 years gold has risen in eight years out of ten during
the month of January. 2012 saw a large rise of 9.14%. 2011 recorded a -
6.74% loss.
• Despite the normal strong seasonals (see chart below) this year gold has
been struggling during the month.
• So, is this the end of the strong fundamentals for gold buying?

5. Lunar New Year Celebrations - I

6. Will Gold Break Its 7 Year Winning Seasonal Streak
This January
• The last fall in gold occurred in 2013 when gold saw -1.71%. During the rest of
2013 prices fell around 28% at one point according to Bloomberg.
• Two days in April 2013 saw around half of that drop lower alone. So, what was
the reason? It was rising real rates on the Fed’s tapering.
• This triggered a sell off in Exchange Traded Funds (ETFs). So any talk of
more tapering will sent jitters down gold bulls remembering 2013.

7. The Case For Gold Bears & Gold Bulls
• The case for gold bears
• Economies bound back, so gold plunges on falling ETF flows.
• The Fed starts tapering this year and the US economy bounces
back from COVID-190.
• The case for gold bulls
• Substantial falls brings in gold value buyers.
• Post COVID-19 economies are still weak and more QE is
undertaken which will provide a strong buying environment for
gold.

8. The Takeaway
• The globe will soon be preparing to exit COVID-19 stimulus packages as long as the
vaccine works as intended.
• This should result in a more optimistic perspective for central banks, including the
Fed.
• My take is that the recovery could be very swift when it comes and the Fed will
most likely find themselves talking about tapering sooner that Dec 2021.
• One interesting tell for me is that the two largest periods of losses in gold have
come on the Pfizer vaccine news and the tapering talk. This indicates to me that the
directional bias is to the downside the stronger the global recovery is.
• The key will be the speed to which tapering is spoken about with gold likely to fall on
talk of Fed tapering.

9. The Takeaway - I

10. Gold Technical Overview

11. Gold Technical Overview - I
• With the latest leg up, the XAU/USD now seems to have confirmed a near-
term bullish breakout through a one-week-old trading range.
• Some follow-through buying beyond the very important 200-day SMA will
reaffirm the constructive outlook and set the stage for an extension of the
recent strong recovery move from the $1,750 area, or two-and-half-month
lows touched in June.
• The next relevant hurdle is pegged near the $1,868-70 region before gold
eventually aims back to reclaim the $1,900 round-figure mark in the near
future.

12. Gold Fundamental Overview
• Investors now seemed to have scaled back their expectations for an
earlier than anticipated policy tightening by the Fed.
• This was evident from a sharp fall in the US Treasury bond yields,
which provided a strong lift to the non-yielding gold.
• The combination of factors prompted some aggressive selling
around the US dollar and was seen as another factor that acted as a
tailwind for dollar-denominated commodities, including gold.

13. Gold Fundamental Overview - I

14. Gold Price: Key Levels To Watch
• The Technical Confluences Detector shows that gold price is likely to face stiff resistance around
$1818 amid renewed buying interest.
• At the level, the previous week’s high and Tuesday’s high collide.
• The next relevant upside barrier is seen at the pivot point one-week R1 at $1823.
• The bulls will then strive to take on the confluence of the SMA200 one-day and SMA200 four-hour
at $1827.
• On the downside, immediate support awaits at $1810, where the Fibonacci 23.6% one-week
converges with the Fibonacci 38.2% one-day and SMA10 four-hour.
• Further south, a dense cluster of support levels is stacked up around $1805, which will limit the
downside attempts.
• That zone is the intersection of the SMA5 one-day, Fibonacci 61.8% one-day and Fibonacci 38.2%
one-week.
• The line in the sand for gold bulls is seen at $1799, the convergence of the previous day low and
the Fibonacci 61.8% one-week.

15. Here Is How It Looks On The Tool

16. XAU/USD Technicals Support Prospects For
Additional Gains
• Gold (XAU/USD) once again showed some resilience below the $1,800 mark,
instead attracted some dip-buying and reversed modest intraday losses.
• The momentum extended through the Asian session on Wednesday, though
the upside seems limited ahead of Fed Chair Jerome Powell's semi-annual
congressional testimony, according to FXStreet’s Haresh Menghani.

17. Set-up Favours XAU/USD Bulls, Powell’s Testimony
Awaited
• “Powell's remarks on the inflation figures should influence market expectations about the
Fed's near-term monetary policy outlook.
• This will play a key role in driving the USD in the near term and provide a fresh directional
impetus to the non-yielding yellow metal.”
• “It will still be prudent to wait for a sustained move beyond the monthly swing highs,
around the $1,818 region, before placing fresh bullish bets.
• The commodity might then accelerate the momentum towards challenging the very
important 200-day SMA, currently around the $1,828-29 zone.
• Some follow-through buying should pave the way for a move beyond an intermediate
barrier, around the $1,852-55 region, towards testing the next major hurdle near the
$1,870 level.”

18. Set-up Favours XAU/USD Bulls, Powell’s Testimony
Awaited - I
• “Dips below the $1,800 mark might continue to find decent support near the
lower boundary of the recent trading range, pegged near the $1,792-90 area.
• Sustained weakness below might be seen as a fresh trigger for bearish
traders and prompt some aggressive technical selling.
• The XAU/USD might then fall to the $1,775 support area, which if broken
decisively will shift the near-term bias back in favour of bearish traders.
• The commodity might then turn vulnerable and accelerate the fall towards the
$1,762-60 area before eventually dropping to retest June monthly swing lows,
around the $1,750 area.”

19. Gold Price & Chart

20. Is Gold Weakness Set To Stay

21. THANKS FOR LISTENING
Is Gold Weakness Set To Stay