Gold Price Forecast : Bullish Technical Breakout Nears - Levels For XAI/ USD

1. Gold Price Forecast: Bullish
Technical Breakout Nears - Levels
For XAU/USD

2. Points To Be Discussed Today:
• Gold Price Outlook
• Gold Volatility And Gold Prices’ Typical Relationship
• GVZ (Gold Volatility) Technical Analysis
• Gold Price Rate Technical Analysis
• Gold Prices’ Technical Structure
• Gold Prices Is Set To Continue For The
Foreseeable Future

3. Gold Price Outlook
• Falling US real yields and a weaker US
Dollar are gilding the path higher for gold
prices.
• Gold prices have already moved above 1810,
and further gains above 1835 would put
bullion in bullish breakout territory.
• According to the IG Client Sentiment Index,
gold prices still have a bullish bias in the near-
term.

4. Through The Headwinds
• The narrative around gold prices is slowly but
surely shifting.
• Last week, it was noted how gold prices had yet
to make a significant technical drive higher.
• Now, on the back of a weaker US Dollar, thanks in
part to falling Fed rate hike odds and plummeting
US real yields, gold prices are moving closer to
fulfilling their bullish potential

5. Through The Headwinds - I
• Although, according to seasonality
studies, November has been the worst month of
the year for gold prices, bullion is faring well as
longer-term fundamental headwinds have abated
in favor of encouraging short-term tailwinds.
• The potential inverse head and shoulders
bottoming pattern first noted last month is now
beginning to take shape.
• The technical picture now looks promising once
again, giving traders a reason to embrace long
gold positions.

6. Gold Volatility And Gold Prices’
Typical Relationship
• Historically, gold prices have a relationship with
volatility unlike other asset classes.
• While other asset classes like bonds and
stocks don’t like increased volatility – signaling
greater uncertainty around cash flows, dividends,
coupon payments, etc. – gold tends to benefit
during periods of higher volatility.
• Gold volatility edging higher has been met with
higher gold prices, which is a promising near-
term development.

7. GVZ (GOLD VOLATILITY) TECHNICAL ANALYSIS: DAILY
PRICE CHART (NOVEMBER 2020 TO NOVEMBER 2021)

8. Gold Volatility
• Gold volatility (as measured by the Cboe’s gold volatility
ETF, GVZ, which tracks the 1-month implied volatility of
gold as derived from the GLD option chain) was trading
at 16.74 at the time this report was written.
• The relationship between gold prices and gold volatility
appears typical relative to historic norms, with the 20-
day correlation holding near its strongest level since
early-June.
• The 5-day correlation between GVZ and gold prices is
+0.69 while the 20-day correlation is +0.65. One week
ago, on November 2, the 5-day correlation was -0.49 and
the 20-day correlation was +0.28.

9. Gold Price Rate Technical Analysis: Daily
Chart (May 2020 To November 2021)

10. Inverse Head And Shoulders Pattern
• For the past two weeks, we’ve noted that “as
trading is a function of both price and time, the
ascending trendline from the May 2019, March
2020, and March 2020 now resides closer to 1810
as key resistance.
• In the event that gold prices are able to clear this
hurdle, it could be a quick trip upwards to the
swing highs established over the summer near
1835, which constitutes the neckline of an inverse
head and shoulders pattern that’s potentially
been forming since June.”

11. Short-term Fundamental Factors
• Even though gold prices have a “dreadful
seasonal backdrop suggests that
November may not be the month to
clear the aforementioned technical
hurdles,” the shift in short-term
fundamental factors has been significant
enough to put the bullish breakout
perspective back in focus.

12. Daily MACD Is Rising
• Gold prices are above their daily 5-, 8-, 13-,
and 21-EMA envelope, which is in bullish
sequential order.
• Daily MACD is rising while above signal line,
and daily Slow Stochastics have entered
overbought territory.
• All of these technical indicators point to
strong bullish moment.

13. Gold Prices Clearing
• While it’s been previously suggested that
“until 1835 is achieved, then there is no sound
technical reason to believe that gold prices
have bottomed.”
• We could be on the cusp of gold prices
clearing 1835, which would put into focus a
major near-term bottom with gains eyed over
the coming months.

14. GOLD PRICE TECHNICAL ANALYSIS: WEEKLY
CHART (OCTOBER 2015 TO NOVEMBER 2021)

15. Gold Prices’ Technical Structure
• Gold prices’ technical structure on the weekly
timeframe is slowly shifting towards a more
bullish directional bias.
• The weekly 4-, 13-, and 26-EMA envelope’s
slope has started to take a positive tilt, suggesting
burgeoning bullish momentum.
• Weekly Slow Stochastics are entering overbought
territory for the first time since late-May, and
weekly MACD is climbing above its signal line.

16. Gold Prices Is Set To Continue For The
Foreseeable Future
• While it thus remains the case that “with a
triangle continuing to take shape (starting in
June 2020), it appears that the sideways
shuffle in gold prices is set to continue for the
foreseeable future, unless the 1835 level is
broken,” the 1835 level may soon be broken
warranting a shift in the longer-term outlook
from neutral to bullish.

17. IG CLIENT SENTIMENT INDEX: GOLD PRICE
FORECAST (NOVEMBER 9, 2021)

18. Retail Trader Data
• Gold: Retail trader data shows 63.10% of
traders are net-long with the ratio of traders
long to short at 1.71 to 1.
• The number of traders net-long is 0.88% lower
than yesterday and 8.43% lower from last
week, while the number of traders net-short is
13.50% higher than yesterday and 20.23%
higher from last week.

19. Gold Prices May Continue To Fall
• We typically take a contrarian view to crowd
sentiment, and the fact traders are net-long
suggests Gold prices may continue to fall.
• Yet traders are less net-long than yesterday
and compared with last week.
• Recent changes in sentiment warn that the
current Gold price trend may soon reverse
higher despite the fact traders remain net-
long.

20. Gold Price Forecast: Bullish
Technical Breakout Nears - Levels
For XAU/USD

21. THANKS FOR LISTENING
Gold Price Forecast: Bullish Technical
Breakout Nears - Levels For XAU/USD