XAU/USD Looks To Retest $ 1,870 Ahead Of US Retail Sales

1. XAU/USD Looks To Retest $1,870
Ahead Of US Retail Sales

2. Points To Be Discussed Today:
• Gold Price Is Heading Back
• Gold Bulls Are Bidding Up
• Gold Technical Analysis
• Gold Daily Chart
• Gold Fundamental Overview

3. Yearly Resistance Line Challenge Gold
Buyers
• Gold struggles around five-month high,
retreats of late.
• US-China talks, indecision over Fed rate hike
and pre-data anxiety portray sluggish markets.
• DXY tracks Treasury yields to the north as
78.6% Fibonacci retracement, yearly
resistance line challenge gold buyers.

4. Gold Price Is Heading Back
• Gold price is heading back towards the key
$1,870 resistance zone, as the US dollar
retreats in tandem with the Treasury yields
amid improving market mood.
• Investors remain hopeful, with the virtual
meeting between US President Joe Biden and
his Chinese counterpart Xi Jinping underway.
• Both leaders look to ease the tense
relationship by pledging more communication.

5. Gold Bulls Are Bidding Up
• Additionally, gold bulls are bidding up ahead of
the critical US Retail Sales release, with the daily
technical setup pointing to more gains in the
offing.
• The 100-Daily Moving Average (DMA) is set to
cross the 200-DMA for the upside, signalling a
potential bull cross.
• Meanwhile, the persistent global inflationary
concerns and expectations of the Fed’s rate hike
timing continue to have a significant bearing on
the bright metal.

6. US Treasury Yields & US Dollar
• Gold (XAU/USD) takes offers to refresh intraday
low, following an uptick to refresh a five-month
high.
• That said, the yellow metal trades near $1,862 by
the press time of Tuesday’s Asian session.
• The commodity buyers initially cheered
upbeat market sentiment to renew the multi-day
top during early Monday before the heavy run-up
in the US Treasury yields and firmer US Dollar
dragged the gold prices.

7. The US 10-year Treasury Yields
• Also challenging the quote is the market’s
cautious mood ahead of the key US Retail
Sales for October, expected to reprint the 0.7%
MoM growth.
• That said, the US 10-year Treasury yields jumped
to a fresh three-week high, underpinning the
US Dollar Index rally to renew the yearly top.
However, the Wall Street benchmarks traded
mixed and restrict the initial moves of the S&P
500 Futures.

8. The US 10-year Treasury Yields - I
• Although optimism surrounding the US-China talks and
US stimulus favor the gold buyers, the Fed rate hike
concerns challenge the metal’s upside momentum.
• US President Joe Biden formally signed his $1.0 trillion
bi-partisan infrastructure bill but a 16-year high
number of the US inflation expectations keep reflation
woes on the top despite the Fed policymakers’
rejections.
• Recently, Richmond Federal Reserve Bank President
Thomas Barkin said, “If ‘need is there’ fed will act to
curb inflation, but good to have a few more months ‘to
see where reality is.’”

9. The Qualitative Factors & Gold Buyers
• Adding to the risk catalysts is the optimism
surrounding the US-China talks.
• That said, US President Joe Biden and his
Chinese counterpart Xi Jinping are up for a
virtual meeting after multiple months of
silence among the world’s top two economies.
• Moving on, the qualitative factors may keep
the gold buyers entertained, likely challenged,
ahead of the key US data.

10. • Despite refreshing the multi-day top, gold fails to
provide a daily closing beyond a descending trend line
from January and 78.6% Fibonacci retracement (Fibo.)
of June-August downside.
• In addition to the key Fibo. and the yearly resistance
line, overbought RSI conditions also challenge gold
buyers around the key $1,867-68 level.
• Also challenging the gold buyers past $1,868 is the
$1,900 threshold and June’s swing high near $1,917, a
break of which will test the yearly peak of $1,959.

11. Gold Technical Analysis - I
• Alternatively, pullback moves may aim for the
61.8% Fibonacci retracement level around
$1,830.
• Should gold sellers dominate past $1,830,
October’s high near $1,813 will be in focus.
• It’s worth noting that the tops marked in July and
September around $1,834 add to the downside
filters.
• To sum up, gold remains bullish but a pullback
can’t be ruled out.

12. Gold Technical Analysis - II
• From a technical perspective, the recent
strong move up witnessed over the past two
weeks or so stalled just ahead of a resistance
marked by a downward sloping trend-line.
• The mentioned barrier extends from
September 2020 swing highs and should now
act as a key pivotal point for short-term
traders.

13. Gold Technical Analysis - III
• Given that the RSI on the daily chart has
moved on the verge of breaking into the
overbought territory, it will be prudent to wait
for a convincing break through the trend-line
before placing fresh bullish bets.
• The XAU/USD might then accelerate the
momentum and aim to reclaim the $1,900
round figure before eventually darting to June
swing highs, around the $1,916-17 region.

14. Gold Technical Analysis - IV
• On the flip side, any meaningful pullback below the
$1,850 level would now be seen as a buying
opportunity.
• This, in turn, should help limit the downside near the
$1.834-32 strong horizontal resistance breakpoint.
Failure to defend the mentioned support levels might
trigger aggressive long-unwinding trade and turn gold
prices vulnerable to slide back towards the $1,800
mark.
• The $1,818-17 region and the $1,808-06 zone could act
as intermediate support levels on the way down.

15. Gold: Daily Chart

16. Gold Fundamental Overview
• Gold settled with modest losses on Monday,
snapping seven successive days of the winning
streak to a more than five-month highs.
• The downtick was exclusively sponsored by a
stronger US dollar, which tends to undermine the
dollar-denominated commodity.
• The greenback remained well supported by
acceptance for an early policy tightening by the
Fed and got an additional boost from upbeat US
macro data.

17. Gold Fundamental Overview - I
• The markets are pricing in the possibility for an
eventual Fed rate hike move by July 2022.
• Moreover, the Fed funds futures indicate a high
likelihood of another raise by November amid
rising inflationary pressure.
• It is worth recalling that data released last
Wednesday showed that US consumer prices in
October surged to the highest level since 1990.
• The data convinced investors that the Fed would
be forced to adopt a more aggressive policy
response to contain stubbornly high inflation.

18. Gold Fundamental Overview - II
• The expectations were reinforced by a fresh leg up in
the US Treasury bond yields, which further
underpinned the greenback and acted as a headwind
for the non-yielding yellow metal.
• On the economic data front, the Empire State
Manufacturing Index surpassed consensus estimates
and jumped to 30.9 in November from 19.8 previous.
• This further contributed to the greenback's overnight
strong move up, though the cautious market mood
helped limit losses for the traditional safe-haven
XAU/USD.

19. Gold Fundamental Overview - III
• Gold managed to find some support ahead of the
$1,855 region and edged higher during the Asian
session on Tuesday.
• Retreating US bond yields kept the USD bulls on the
defensive and turned out to be a key factor lending
some support to the commodity.
• The uptick, however, lacked bullish conviction amid a
generally positive tone around the equity markets.
Investors will keep a close eye on a key meeting
between US President Joe Biden and Chinese leader Xi
Jinping for some meaningful impetus.

20. XAU/USD Looks To Retest $1,870
Ahead Of US Retail Sales

21. Thanks for listening
XAU/USD Looks To Retest $1,870
Ahead Of US Retail Sales