Gold Price Analysis : XAU/USD Probing Multi - Month Highs Amid Bullish Bank Calls

1. Gold Price Analysis: XAU/USD
Probing Multi-month Highs Amid
Bullish Bank Calls

2. Points To Be Discussed Today:
• Spot Gold Is Higher
• Gold Technical Analysis: Eyeing $1900
• A Pressure Factor On Gold's Gains
• Technical Analysis
• XAU/USD Eyes US Retail Sales For Direction
• Gold Technical Forecast

3. Spot Gold Is Higher
• Spot gold is currently probing multi-month
highs at $1870.
• The precious metal will take its cue mostly
from Fed-related developments this week.
• Spot gold (XAU/USD) is higher this morning
and trading above $1865 as it continues to
trade with a bullish bias.

4. Gold Looks Bullish
• The dip under $1860 during Monday’s Asia Pacific trading
hours attracted good demand.
• Spot prices have been flirting with multi-month highs at
$1870 printed last week, as gold continues to benefit
from bullish bank commentary, with Goldman Sachs the
latest to forecast the precious metal moving back to the
$2000 level.
• Technically speaking, the picture for gold looks bullish.
• If the precious metal can break above resistance at
$1870, its next move will likely be towards $1900.

5. Gold Looks Bullish - I

6. Gold Looks Bullish - II

7. Real Yields
• Real yields across developed markets remain close to
record lows, with the US 10-year TIPS currently
around -1.17% and the German inflation-linked 10-
year yield currently under -2.0%.
• The fact that real yields are so low (and financial
conditions thus so accommodative) despite the
recent acceleration of headline inflation rates across
developed markets has resulted in central banks like
the Fed and ECB facing criticism for being too dovish.

8. Real Yields - I
• In other words, letting inflation run out of control and
keeping interest rates low anyway, thus pushing real
yields excessively low.
• Whether or not central banks are making a dovish
policy mistake, gold is a big beneficiary, as lower real
yields reduce the opportunity cost of holding gold.
• US real yields are on Monday trading with a slight
downside bias, which helped the spot metal off earlier
lows.

9. Hawkish Vibes From FOMC Members
• Ahead, the main themes for precious metals like gold
this week are all Fed-related; US President Joe
Biden’s decision on who will be nominated as the
next Fed Chair may be announced and large number
of Fed policymakers will be speaking publically.
• Markets will be attuned to any change in tone on
inflation after last week’s upside Consumer Price
Inflation (CPI) surprise. Any hawkish vibes from
FOMC members might present a challenge for
spot gold prices.

10. Gold Technical Analysis: Eyeing $1900
• Gold futures continued to rise, benefiting from
a combination of a weak US dollar and rising
inflation fears.
• Now that the price of gold settled above
the psychological resistance of $1800, which
increased buying until its gains reached the
resistance level of $1868, its highest in five
months

11. Gold Technical Analysis: Eyeing $1900 - I
• Eyes are on the next psychological peak of
$1900s. This will depend on the dollar's path
and investor sentiment towards risk appetite or
not.
• Gold prices succeeded in making a weekly jump
of about 2.7%, to reduce its decline since the
beginning of the year 2021 to date to less than
2%.

12. Traditional Roles Of Gold Were
Announced As Hedge
• All in all, the metals market saw a significant rally last week
as investors sought a shelter from rising inflation.
• The traditional roles of gold were announced as a hedge
against rising inflation over the past week.
• As more traders flock to these metallic commodities, it is
likely to push prices up to $1,900 an ounce, as market
analysts expect.
• In this regard, Neil Wilson, chief market analyst at
Markets.com, wrote in a daily note: “Inflation is at the
forefront of investors’ minds after the US CPI report, which
led to a sharp rise in the value of gold and the US dollar.”

13. A Pressure Factor On Gold's Gains
• Individual investors can also buy gold after the University of Michigan
Consumer Confidence Index fell to 66.8 in November, down from 71.7
in September.
• The market had expected a reading of 72.4. It also revealed lower
consumer expectations, while opinions on current economic
conditions also declined. Inflation expectations rose slightly to 4.9%.
• It is a pressure factor on gold's gains. The US Dollar Index (DXY), which
measures the performance of the US currency against a basket of six
major competing currencies, fell to 95.18.
• The US Dollar Index achieved a weekly gain of about 0.8%, raising its
2021 annual gains to date to nearly 6%. Double the profit is beneficial
for dollar-denominated commodities because it makes them cheaper
to buy for foreign investors.

14. • Another factor affecting the gold market. US
Treasury yields rose as the trading week closed,
with the benchmark 10-year yield rising to
1.575%.
• One-year bond yields rose to 0.165%, while 30-
year yields jumped to 1.954%.
• The environment for a higher price is usually
bearish for gold because it raises the opportunity
cost of holding non-yielding bullion.

15. Technical Analysis
• The stability of the gold price above the psychological resistance
of $1800 will continue to support the continuation of the
upward trend, which will not change without penetrating below
it.
• The continued fears of the markets and investors regarding
COVID, which may disrupt the path of global economic recovery,
in addition to the level of the dollar, are all factors that will affect
gold in the coming days, not to mention the policies of global
central banks.
• Currently, the closest bullish targets are $1878 and $1900.
• The latter may push the technical indicators towards strong
overbought levels, which warns that profit taking could happen
at any time.

16. Technical Analysis - I

17. XAU/USD Eyes US Retail Sales For
Direction
• Gold’s recent upside appears to be stalling out
after prices cleared a key level of resistance
during last week’s big +2.64% gain.
• XAU is currently trading near the highest levels
since early June despite rising Treasury yields
and a stronger US Dollar – two things which
typically work against the non-interest-bearing
asset.

18. XAU/USD Eyes US Retail Sales For
Direction - I
• Still, given gold’s recent move amid inflation
hitting multi-decade highs via the CPI index, it's
clear investors’ appetite for the yellow metal is
heating up.
• Historically, gold is viewed as a store of value
and an asset that withstands periods of
economic stagnation. Gold also has an inflation-
hedging appeal – although there is a debate
over that claim’s veracity.

19. Gold Technical Forecast
• XAU/USD sliced above a critical level of resistance
that has capped gold’s upside going back to July.
• The break higher brought further strength, with
the 1900 psychological level now in focus.
• A pullback would see the rising 9-day
Exponential Moving Average (EMA) offer possible
support, with the aforementioned resistance
level below that.

20. Gold Price Analysis: XAU/USD
Probing Multi-month Highs At
$1870 Amid Bullish Bank Calls

21. thanks for listening
Gold Price Analysis