Gold Technical Analysis : Climbing Higher Despite USD

1. Gold Technical Analysis: Climbing
Higher Despite USD

2. Points To Be Discussed Today:
• Gold Is Stabilizing
• Technical Analysis
• Weekly Fundamental Gold Price Forecast: Neutral
• Gold Prices Week In Review
• Economic Calendar Week Ahead
• Gold Price Versus Cot Net Non-Commercial
Positioning
• IG Client Sentiment Index
• Gold / Expecting Buy Trend

3. Gold Is Stabilizing
• Despite the recovery of the US dollar, gold is
stabilizing around the psychological resistance
level of $1800 as of this writing.
• This confirms what we mentioned in recent
technical analyses, which is that gold has many
factors to achieve gains, but the strength of the
dollar prevents this from happening.
• The limited dollar weakness and lower Treasury
yields increased the demand for the yellow metal
as a safe haven.

4. UK Budget And The Bank
Of Canada Policy Announcement
• In addition to absorbing the UK budget and the Bank
of Canada policy announcement, traders are also
looking forward to the upcoming monetary policy
announcements from the Bank of Japan and the
European Central Bank.
• The Bank of Canada left interest rates unchanged but
ended its quantitative easing program, indicating
progress in the economic recovery.
• Meanwhile, British Chancellor Rishi Sunak announced
that public spending will increase by 150 billion pounds
in an attempt to support a strong economic recovery
after the crisis caused by the pandemic.

5. Data From The Commerce
Department
• The US Dollar Index (DXY) fell to 93.69 before regaining some of
its gains. The yield on the 10-year US Treasury fell to about
1.565%, while the yield on the 30-year Treasury fell to 1.973%.
• Data from the Commerce Department showed US durable goods
orders fell much less than expected in September, falling 0.4%
after jumping a downwardly revised 1.3% in August.
• Economists had expected durable goods orders to decline 1.1%
compared to the sharp rise of 1.8% announced the previous
month.
• Excluding a sharp drop in transportation equipment orders,
durable goods orders rose 0.4% in September after rising 0.3% in
August.
• The increase matched economists' estimates.

6. Technical Analysis
• I still confirm that the stability of the gold price above
the psychological resistance of $1800 will increase
buying and push gold to stronger ascending levels, the
closest of which are $1819, $1827 and $1845. On the
other hand, these expectations may be threatened if
the gold price moves to the support levels of $1775
and $1760.
• If this happens, it will be a new opportunity for buyers.
• Gold will be affected today by the European Central
Bank's announcement of its monetary policy decisions,
the announcement of the US GDP growth rate and the
number of weekly jobless claims.

7. Technical Analysis - I

8. Weekly Fundamental Gold Price
Forecast: Neutral
• Gold prices are facing difficulties in the
coming days as more and more central banks
take a hawkish turn.
• The last week of October may have served as
a precursor for a much weaker environment to
come for gold prices.
• The IG Client Sentiment Index suggests
that gold prices in USD-terms (XAU/USD) have
a bearish trading bias.

9. Gold Prices Week In Review
• Gold prices struggled mightily last week,
against all major currencies but for
the Euro (gold in EUR-terms (XAU/EUR),
+0.23%) and the British Pound (gold in GBP-
terms (XAU/GBP), 0%).
• Rapidly rising bond yields, particularly among
the commodity currency sovereigns –
Australia, Canada, and New Zealand – plagued
precious metals.

10. Gold Prices Week In Review - I
• Gold in AUD-terms (XAU/AUD) dropped by -
1.27% on the week, the worst performing
gold-cross, while gold in NZD-terms
(XAU/NZD) fell by -0.67%), the second worst
performing gold-cross.
• Even gold in USD-terms (XAU/USD) closed the
week lower by -0.51%, thanks in part to the
sharp end-of-month rally by the US Dollar (via
the DXY Index).

11. Economic Calendar Week Ahead
• Coming into the first week of November
where a trio of major central banks are
expected to take a more hawkish turn.
• The Bank of England, the Federal Reserve,
and the Reserve Bank of Australia – the last
week of October may have served as a
precursor for a much weaker environment to
come for gold prices.

12. Economic Calendar Week Ahead - I
• On Monday, gold in USD-terms (XAU/USD) will be
in the spotlight as the October US Markit
Manufacturing PMI and October US ISM
Manufacturing PMI will be released shortly after
the US cash equity open.
• On Tuesday, gold in AUD-terms (XAU/AUD) will
garner attention amid the November Reserve
Bank of Australia rate decision, while gold in NZD-
terms (XAU/NZD) will likewise be in focus around
the release of the 3Q’21 New Zealand labor
market report.

13. Economic Calendar Week Ahead - II
• On Wednesday, gold in USD-terms (XAU/USD) is back
at the forefront of gold-crosses thanks to the
November Federal Reserve rate decisions.
• On Thursday, gold in GBP-terms (XAU/GBP) is in the
spotlight when the Bank of England concludes its
November rate decision, which will include the release
of the Quarterly Inflation Report.
• On Friday, the week concludes with gold in CAD-terms
(XAU/CAD) and gold in USD-terms (XAU/USD) in focus
as the October Canada labor market report and
October US NFP report are released ahead of the US
cash equity open.

14. Gold Price Versus Cot Net Non-Commercial Positioning: Daily
Timeframe (October 2020 To October 2021)

15. Gold Price Versus Cot Net Non-
Commercial Positioning - I
• Next, a look at positioning in the futures market.
• According to the CFTC’s COT data, for the week
ended October
26, speculators increased their net-long gold
futures positions to 225,443 contracts, up from
the 199,446 net-long contracts held in the week
prior.
• The futures market is now the most net-long
since the second week of June.

16. IG Client Sentiment Index: Gold Price
Forecast (October 29, 2021)

17. IG Client Sentiment Index - I
• Gold: Retail trader data shows 78.48% of
traders are net-long with the ratio of traders
long to short at 3.65 to 1.
• The number of traders net-long is 10.17%
higher than yesterday and 16.01% higher from
last week, while the number of traders net-
short is 3.83% lower than yesterday and 1.12%
higher from last week.

18. IG Client Sentiment Index - II
• We typically take a contrarian view to crowd
sentiment, and the fact traders are net-long
suggests Gold prices may continue to fall.
• Traders are further net-long than yesterday
and last week, and the combination of current
sentiment and recent changes gives us a
stronger Gold-bearish contrarian trading bias.

19. Gold / Expecting Buy Trend

20. Gold Technical Analysis: Climbing
Higher Despite USD

21. Thanks for listening
Gold Technical Analysis: Climbing
Higher Despite USD