XAU/USD Retreats Below $ 1750 And US Debt Ceiling Anxiety

1. XAU/USD Retreats Below $1,750
Amid US Debt Ceiling Anxiety

2. • Gold (XAU/USD) Pares Intraday Gains
• Gold (XAU/USD) Consolidates The Monthly Losses
• The US 10-year Treasury Yields
• Gold: Daily Chart
• Gold Technical Analysis
• Gold, Daily Chart, Prior Analysis
• Gold, Daily Chart, Live Market
• Gold Fundamental Overview

3. Gold (XAU/USD) Pares Intraday Gains
• Gold (XAU/USD) pares intraday gains, the first
in a week, around $1,730 heading into
Thursday’s European session.
• In doing so, the yellow metal fades bounce off
a seven-week low as traders remain cautious
over the key challenges to sentiment despite
initially cheering the intermediate solution.

4. Yellow Metal Cheered The US
Policymakers’ Ability
• The yellow metal previously cheered the US
policymakers’ ability to avoid the government
shutdown, as well as news 74% efficacy of
Pfizer’s covid vaccine.
• However, the major obstacles for the US
Democrats, over the debt ceiling and stimulus
package, remain unsolved as the deadline
approaches.

5. Gold Keeps Bounce Off
• Gold keeps bounce off bi-annual horizontal
support amid cautious optimism.
• US Treasury yields step back from three-
month top, DXY eases from yearly high to
snap four-day uptrend.
• China factory activity contracts for the first
time since February 2020, Evergrande, US
debt ceiling also in focus.

6. The US Dollar Index (DXY) Pullback
• Additionally, news of Evergrande’s missing
coupon payment and fears over China’s economic
recovery offer extra challenges to the gold
buyers.
• Though, easy Treasury yields and the US Dollar
Index (DXY) pullback keep buyers hopeful ahead
of crucial US Senate session.
• Also important will be the final readings of US Q2
GDP and updates concerning Evergrande, as well
as China.

7. Gold (XAU/USD) Consolidates The
Monthly Losses
• Gold (XAU/USD) consolidates the monthly
losses, the heaviest since June, picking up bids
to refresh intraday high near $1,730 during
early Thursday.
• In doing so, the yellow metal tracks the US
Treasury yields’ pullback to bounce off the
short-term key support area.

8. The US 10-year Treasury Yields
• The US 10-year Treasury yields drop 3.0 basis points
(bps) to 1.51%, extending pullback from a six-month
high flashed the previous day as traders shift their
attention from the Fed tapering concerns to US
stimulus and debt ceiling headlines.
• US House Speaker Nancy Pelosi is hopeful of a solution
and President Joe Biden also turned down his official
travel plans to solve the critical issue on hand, which in
turn favor investors expecting the diplomats to avoid
closure of the US government offices on October 01.

9. The S&P 500 Futures To Print Mild
Gains By The Press Time
• Also, the News of AstraZeneca’s covid vaccine
showing 74% efficacy in the large US trial seems to
have underpinned the latest hopes of overcoming
the Delta covid crisis and underpins the S&P 500
Futures to print mild gains by the press time.
• However, China’s first factory activity contraction
since February 2020 and a second coupon payment
default by Evergrande joins Fed Chairman Jerome
Powell’s firm support to the tapering to challenge the
mood, as well as the gold prices.

10. The US Dollar Index (DXY)
• That said, the US Dollar Index (DXY) eases from
the yearly high around 94.30, snapping a four-day
uptrend.
• Moving on, headlines concerning China and
Evergrande, not to forget Fedspeak and second-
tier data from the US may entertain gold traders.
• However, major attention will be given to the
news from the US Senate over the infrastructure
spending bill and debt ceiling extension. Should
the policymakers manage to tackle the problem,
gold may extend recovery moves.

11. Bearish MACD Challenges
• Nearly oversold RSI triggered the gold price
rebound from early August levels, also
comprising six-month-old horizontal support.
• However, bearish MACD challenges the recovery
moves below the weekly resistance line.
• Hence, the commodity is likely to remain on the
consolidation mode between $1,721 and $1,738
levels with more support to the bears than
otherwise.

12. The Quote Drops Below The Key
• Should the quote drops below the key
horizontal support near $1,721, its slump to
$1,700 and the recent low near $1,687 can’t
be ruled out.
• On the contrary, an upside break of $1,738
will have to cross a seven-week-old horizontal
hurdle around $1,745 before targeting the
descending resistance line from September 03
near $1,765.

13. Gold: Daily Chart

14. Gold Technical Analysis
• The most recent move lower in gold’s
price has seen it break through a
descending trend line support.
• On this move, the price touched the
lower bound of the 21-day Bollinger
Band twice before consolidating back
inside the band.

15. Gold Technical Analysis - I
• Since making a high in early September, the
gold price has trended lower, setting up a
number of retracement peaks along the way.
• Resistance might be found at these previous
highs of 1787.24, 1808.74 and 1834.14.
• The high of 1834.14 was made in July and
several attempts at going above this level
were unsuccessful.

16. Gold Technical Analysis - II
• The 10-day simple moving average (SMA) and
the 21-day SMA have a negative gradient and
are both above the gold price, which could be
bearish.
• The descending trend line from the early
September high, currently at 1770.50, could
offer resistance should it be tested.

17. Gold, Daily Chart, Prior Analysis

18. Gold, Daily Chart, Live Market

19. Gold Fundamental Overview
• On Thursday, gold price has staged a modest recovery
from fresh seven-week lows, as the market sentiment
improves amid retreating Treasury yields, capping the
upside in the US dollar.
• Upbeat Chinese Caixin Manufacturing PMI, an aversion
to the US government shutdown and a rebound in metals
and energy prices seem to have revived the risk-on
trades.
• However, the further upside in gold price remains
elusive, as the Fed’s hawkish expectations will continue
leading the sentiment, underpinning the yields and the
dollar while weighing negatively on the non-interest-
bearing gold.

20. XAU/USD Retreats Below $1,750
Amid US Debt Ceiling Anxiety

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XAU/USD Retreats Below $1,750
Amid US Debt Ceiling Anxiety