Gold prices continue to face pressure below $1,760 as US Treasury yields rise, supporting the US dollar. Higher inflation concerns are keeping the dollar strong despite disappointing US jobs data, as the Fed is still expected to taper asset purchases in November. While a taper is likely, stagflation risks from ongoing supply issues could spark short covering in gold, which is seen as a hedge against rising inflation and slowing growth. Technical analysis indicates gold may test resistance at $1,790 first before a potential move higher toward its 200-day moving average.

1. XAU/USD Remains Depressed
Below $1,760 Amid Higher US T-
yields

2. Points To Be Discussed Today:
• Gold Prices Continue To Face Pressure
• The US Dollar Index (DXY)
• Stagflation Risks Is a + For Gold
• Gold, Daily Chart
• Gold Technical Analysis
• Gold Trend
• Gold Price & Chart

3. Gold Prices Continue To Face Pressure
• Gold is starting out the week on the back
foot.
• Gold bulls are under pressure near-daily
support.
• Inflation concerns are keeping the US dollar
underpinned on Fed expectations.
• Gold prices continue to face pressure near the
higher levels and trades in a broader range of
$1,750 and $1,770 for the past week.

4. The US Dollar Index (DXY)
• Multiple factors contributed to the downside
movement in the precious metal, which
included a steady US dollar, higher US T-bond
yields and weekly equities gains.
• The US Dollar Index (DXY), which tracks the
buck’s performance against its six major rivals,
stays strong near 94.10 with mild losses.

5. The US Dollar Index (DXY) - I
• A higher USD valuation makes gold expensive
for the other currencies holder.
• The US benchmark 10-year Treasury yields
jumped to 1.61% as investors remain
concerned over persistently higher inflation
and expectations of early Fed tapering as soon
as November, despite disappointing NFP data.

6. Gold On The Back Foot
• However, the recent pullback in equities points at risk
aversion among investors, which provided support to
the precious metal at lower levels.
• It is worth noting that, S&P Futures is trading at
4,367.50 down 0.33% for the day.
• The price of gold on Monday in Asia has started out on
the back foot as the greenback pops into bullish
territory as measured by the DXY, or against a basket of
rival major currencies.
• At the time of writing, XAU/USD is trading at $1,751.29
and down some 0.3%, falling from a high of $1,758.40.

7. The US Dollar
• The Labor Department said in its employment
report on Friday that nonfarm payrolls increased
by 194,000 jobs last month.
• Economists polled by Reuters
had forecast payrolls increasing by 500,000 jobs.
• The US dollar was largely unmoved by a
disappointing US Employment report on Friday.
• Investors were of the opinion that the lack lustre
numbers may not sway the Federal reserve from
starting a tapering of its asset purchases as early
as November.

8. Inflation Pressures Are Still Expected
To Persist
• The data implies that the winter period could be slower
in terms of growth, but inflation pressures are still
expected to persist.
• This means that despite a potential slowdown, the
Federal Reserve will still be looking to start the process
of reducing its monthly bond purchases as soon as the
November 2-3 policy meeting.
• 'The jobs report came in well below expectations,
questioning the timing of a well-telegraphed
November taper, as well easing some enthusiasm
about Fed hikes in 2022,'' analysts at TD Securities
explained.

9. Stagflation Risks Is a + For Gold
• ''While the taper is a foregone conclusion,
there could be some short-covering following
aggressive flows associated with the pricing of
a November Fed exit.
• Looking beyond Fed pricing, higher wages
and no rise in participation rate will keep the
stagflation theme alive, and gold could be an
ideal hedge against these rising stagflationary
winds,'' the analysts at TDS argued.

10. Stagflation Risks Is a + For Gold - I
• From another angle, the analysts also take in
the global energy crisis which has been
intensifying.
• The analysts at TDS explained that this is
''impacting the production of goods across the
world and supply chains across Europe and
Asia, so reasons to own the yellow metal are
growing more compelling.''

11. Stagflation Risks Is a + For Gold - II
• ''Indeed, as these issues fuel concerns of slowing
demand and rising inflation, price action across
rates in recent trading sessions suggest that
global macro is just starting to price in
implications of the energy crisis.
• After all, the Post-Fed move higher in rates was
led by real rates, whereas it is now being led by
breakevens, suggesting the market is pricing in
higher inflation due to the spike in energy, but
acknowledging that this is a supply-shock which
impacts growth negatively.''

12. Stagflation Risks Is a + For Gold - III
• ''In turn, with positioning in the yellow
metal increasingly short, including CTAs,
potential strength in gold due to this
growing stagflationary narrative could
spark aggressive short covering on the
horizon.''

13. Gold, Daily Chart

14. Gold's 200-day Moving Average
• ''Given the daily bullish close at support and
the wick, the expectations are for it to be filled
in by price action in the next few sessions.
• The target area for gold is based on a -272%
Fibonacci retracement of the 50% mean
reversion and corrective range.
• This comes in at 1,790 with a confluence of
the prior structure and en route to gold's 200-
day moving average. ''

15. Technical Analysis

16. Technical Analysis - I

17. Gold Trend

18. Gold Spot / U.S. Dollar

19. XAUUSD Chart

20. XAU/USD Remains Depressed
Below $1,760 Amid Higher US T-
yields

21. Thanks for listening
XAU/USD Remains Depressed Below
$1,760 Amid Higher US T-yields