2. Points To Be Discussed Today:
• Gold’s Technical Outlook Remains Bearish
• The Relative Strength Index (RSI)
• Gold Continued To Edge Higher
• Gold Remains Capped By $1,800
• Gold A Less-Desirable Investment
• Daily Swing Chart Technical Forecast
3. Gold’s Technical Outlook Remains
Bearish
• After closing the last week on a slightly
negative note by shedding $3.90 (-0.22
percent) on a week-on-week basis at
$1,758.10 per ounce.
• Gold’s technical outlook remains bearish with
the commodity failing to break above the 20-
day simple moving average (SMA) for the 18th
straight trading day.
4. The Relative Strength Index (RSI)
• The relative strength index (RSI) indicator
stays slightly below 50, confirming the view
that sellers are looking to remain in control of
gold’s action.
• Overall, the gold price has shed around 4.5
percent during the last four weeks and there is
a clear bearish shift in its outlook.
5. The Price Of Gold Decreased
• Meanwhile, the price of gold decreased by 0.31
percent in Pakistan during the last week.
• The price of 10 grams of yellow metal in Pakistan was
Rs96,600 at the opening of the last week and it
decreased to Rs96,300 to close the week.
• The difference in depreciation in gold price in the local
and international markets was due to depreciation of
the local currency, which depreciated by 0.03 percent
against the US dollar during the week, with the dollar
opening at Rs170.48 on Monday last and closing at
Rs170.53 on Friday last.
6. A Technical Point Of View
• From a technical point of view, the initial support
is located at $1,750 (lower limit of the weekly
channel) ahead of $1,730 (static level) and $1,720
(late September low).
• On the flip side, the first hurdle aligns at $1,763
(20-day SMA) ahead of $1,780 (October 8 high,
50- day SMA).
• Only a daily close above the latter could open the
door for a prolonged rebound towards $1,800,
where the 100-day SMA and 200-day SMA meet.
7. Gold Continued To Edge Higher
• During the last week, gold continued to edge higher
on Monday and reached a 10-day top of $1,770.
• Nevertheless, gold struggled to extend its rebound
amid dollar resilience and formed a horizontal
trading channel with a lower limit of $1,750.
• Although gold broke above that channel on Friday
and touched a 15-day high of $1,781 with the initial
reaction to the disappointing September jobs report
from the US, it retreated below $1,770 ahead of the
weekend.
8. The US Bureau Of Labour Statistics
• In the coming week, the US Bureau of Labour Statistics will
release the Consumer Price Index (CPI) data for September
on Wednesday.
• Investors forecast the annual CPI to tick up to 5.4pc from
5.3pc in August.
• On Thursday, the US Department of Labour’s weekly initial
jobless claims data will be looked upon for fresh impetus
ahead of Friday’s Retail Sales report, which is anticipated to
show a modest contraction in September.
• It is pertinent to mention that TLTP Research Wing
predicted on October 3 that gold’s short- and medium-term
outlook is bearish.
9. Gold Remains Capped By $1,800
• Gold prices charted a very volatile session on
Friday, finally closing the session with
marginal losses and within the prevailing
consolidative range.
• The move was amidst rising open interest and
volume, allowing for the continuation of this
range bound theme in the very near term.
• In the meantime, the precious metal remains
capped by the $1,800 mark per ounce troy.
11. Gold A Less-Desirable Investment
• Gold futures went up then they went down
before closing lower on Friday.
• The wicked price action was fueled by traders
who reacted to the Non-Farm Payrolls report
headline number while failing to notice the surge
in U.S. Treasury yields.
• When yields rise, investors tend to move their
money to where they can get the greatest return.
• This makes gold a less-desirable investment.
13. Daily Swing Chart Technical Analysis
• The main trend is up according to the daily swing
chart.
• The trend changed to up when buyers took out
the last swing top at $1771.50 on Friday.
• A trade through $1745.40 will change the main
trend to down.
• Gold also posted a potentially bearish closing
price reversal top on Friday so we may see a shift
in momentum if the chart pattern is confirmed.
14. Gold Closed On The Weak Side
• Gold closed on the weak side of a pivot at
$1757.40, making it resistance.
• Additional resistance is lined up at $1765.90,
$1779.00 and the price cluster at $1795.00 to
$1800.00.
• On the downside, the first potential support
comes in at $1738.60.
• If it fails to hold, we could see a sharp break
into the next support at $1716.00.
15. Daily Swing Chart Technical Forecast
• The direction of December Comex gold early
Monday is likely to be determined by trader
reaction to $1757.40.
• Bearish Scenario
• A sustained move under $1757.40 will signal
the presence of sellers. The first target is
$1751.80, followed by the main bottom at
$1745.40.
16. Bearish Scenario
• Taking out $1745.40 will change the main
trend to down. This could trigger a break into
$1738.60.
• Counter-trend buyers could come in on a test
of $1738.60, but if it fails then look for the
selling to possibly extend into the next main
bottom at $1721.10, followed by $1716.00.
17. Bullish Scenario - I
• A sustained move over $1757.40 will indicate
the presence of buyers. If this move creates
enough upside momentum then look for a
labored rally with potential targets $1765.90,
$1779.00 and $1782.40.
• Taking out $1782.40 could trigger a move into
the next main top at $1788.40, followed by
the resistance cluster at $1795.00 to
$1800.00.
