XAU/USD Approaches $ 1,800 Mark Amid Weaker USD

1. XAU/USD Approaches $1,800 Mark
Amid Weaker USD

2. Points To Be Discussed Today:
• Gold Struggled To Capitalize
• Gold Reversed An Intraday Dip
• Gold Witnessed Some Selling
• Short-Term Opportunities Around Gold
• Gold Vulnerable To Accelerate
• Support & Resistance Level
• Elliott Wave Analysis: Gold Is Targeting $1800

3. Gold Struggled To Capitalize
• Gold struggled to capitalize on the
previous day’s strong rally to near one-
month tops.
• Hawkish Fed expectations turned out to
be a key factor that capped gains for the
metal.
• Bulls now wait for a sustained move
beyond the 100/200-day SMA confluence
hurdle.

4. Gold Reversed An Intraday Dip
• Gold reversed an intraday dip to the $1,787-
86 region and has now moved into the
positive territory for the third successive day.
• The XAU/USD jumped to near one-month tops
during the first half of the European session,
with bulls now looking to build on the
momentum beyond the very important 200-
day SMA..

5. The US Dollar Extended
• The US dollar extended the previous day's
retracement slide from 13-month tops, which,
in turn, was seen as a key factor that acted as
a tailwind for dollar- denominated
commodities, including gold.
• Apart from this, a further decline in the
longer-dated US Treasury bond yields
extended some additional support to the non-
yielding yellow metal.

6. The XAU/USD Can Capitalize On The
Move
• This, to a larger extent, helped offset the risk-on
impulse in the markets, which tends to undermine
demand for the traditional safe-haven gold.
• It, however, remains to be seen if the XAU/USD can
capitalize on the move or meets with fresh supply at
higher levels amid firming expectations for an early
policy tightening by the Fed.
• Nevertheless, a sustained strength beyond the $1,800
mark will be seen as a fresh trigger for bullish traders
and set the stage for additional gains.

7. Gold Witnessed Some Selling
• Gold witnessed some selling during the Asian
session on Thursday and eroded a part of the
previous day's strong rally to the highest level
in about a month.
• The XAU/USD, which is seen as a hedge
against inflation, benefitted after the US CPI
report showed a continuous rise in
inflationary pressures.

8. The Dollar-denominated Commodity
• Against the backdrop of last Friday's
disappointing NFP print, the data
aggravated fears about the return of
stagflation.
• This, along with a broad-based US
dollar weakness, provided a strong boost
to the dollar-denominated commodity.

9. US Treasury Bond Yields
• The greenback witnessed a typical 'buy the
rumour, sell the fact' kind of a reaction and
reversed its weekly gains to 13-month tops
following the report.
• A further decline in the longer-dated US
Treasury bond yields was seen as another
factor that weighed heavily on the buck.

10. The FOMC Monetary Policy
• That said, expectations for an early policy
tightening by the helped limit any further
losses for the USD.
• The minutes of the FOMC monetary policy
meeting held on September 21-22 reaffirmed
that the US central bank remains on track to
begin tapering its bond purchases in 2021.

11. The Non-yielding Yellow Metal
• Moreover, a growing number of policymakers
were worried that inflation could persist,
forcing investors to bring forward the likely
timing of a potential Fed rate hike move.
• The markets now seem to have started
pricing in the possibility of the so-called lift-off
in September 2022 and kept a lid on any
further gains for the non-yielding yellow
metal.

12. Producer Price Index (PPI)
• The overnight momentum faltered near the very
important 200-day SMA, just ahead of the $1,800
mark, which should now act as a key pivotal point
and help determine the near-term trajectory for
gold.
• Market participants now look forward to the US
economic docket, featuring the release
of Producer Price Index (PPI) and Weekly Initial
Jobless Claims later during the early North
American session.

13. Short-term Opportunities Around
Gold
• This, along with the US bond yields and
speeches by influential FOMC members, will
influence the USD price dynamics.
• Apart from this, the broader market risk
sentiment might also provide some impetus
and allow traders to grab short-term
opportunities around gold.

14. 100-day and 200-day SMAs
• Bulls might now wait for a sustained move
beyond the $1,796-99 confluence region,
comprising of 100-day and 200-day SMAs
before placing fresh bets.
• Some follow-through buying beyond the
$1,806 area will reaffirm the
positive outlook and lift the XAU/USD back
towards the $1,818-20 intermediate hurdle
en-route the $1,832-34 heavy supply zone.

15. Gold Vulnerable To Accelerate
• On the flip side, any further decline is likely to
find decent support near the $1,775 horizontal
zone.
• Sustained weakness below might prompt some
technical selling and turn gold vulnerable to
accelerate the fall towards the $1,763-62 support
zone.
• The next relevant support is pegged near the
$1,750 region, which if broken decisively will shift
the near-term bias back in favour of bearish
traders.

16. XAUUSD

17. XAU/USD Is Up For A Third
Consecutive Day
• XAU/USD is up for a third consecutive day, although
posting a modest advance when compared to
Wednesday’s rally.
• The daily chart shows that the price is hovering
around a bearish 200 SMA, while the 100 SMA capped
the intraday advance, both heading lower and
developing within a limited range.
• In the meantime, technical indicators have lost their
bullish strength, but consolidate near intraday highs,
rather reflecting the ongoing consolidation instead of
suggesting upward exhaustion.

18. Support & Resistance Level
• In the near term, and according to the 4-hour
chart, the bright metal is bullish yet at risk of
correcting lower should it fail to break above the
1,800 threshold.
• Technical indicators in the mentioned time frame
consolidate within overbought levels as XAU/USD
develops well above its moving averages.
• The bullish case will be firmer if the metal moves
beyond 1,808.63, September 14 daily high.
• Support levels: 1,790.59 1,777.75 1,764.35
• Resistance levels: 1,808.63 1,820.02 1,831.90

19. Elliott Wave Analysis: Gold Is
Targeting $1800
• After the release of the CPI numbers yesterday, Gold
managed to quickly break through the $1,770-$1,780
resistance area in the North American Session, rallying
from the September low of $1,721 which has risen
close to $80.
• Is the current Gold rally over?
• As per Elliott Corrective Wave analysis, the rally from
$1,721 to $1,781 completed wave A, and currently,
wave C looks unfinished, so we may see Gold continue
to rise to the $1805-$1810 area, which is also a strong
daily price resistance level.

20. XAU/USD Approaches $1,800 Mark
Amid Weaker USD

21. Thanks for listening
XAU/USD Approaches $1,800 Mark
Amid Weaker USD