Gold Price Forecast : XAU/USD Eyes $1,780 Amid Recent USD Weakness

1. Gold Price Forecast: XAU/USD Eyes
$1,780 Amid Recent USD Weakness

2. Points To Be Discussed Today:
• Gold Gained Some Positive Traction
• Gold Prices Lock
• Gold Prices Score More
• Support To The Safe-haven Precious Metal
• Appreciating Move For Gold
• Trading Opportunities Around Gold
• Technical Outlook
• Fundamental Overview

3. Gold Gained Some Positive Traction
• Gold gained some positive traction on
Tuesday and snapped two days of the losing
streak.
• Retreating US bone yields undermined the
USD and extended some support to the
metal.
• Hawkish Fed/BoE might cap gains and
warrants some caution for aggressive
bullish traders.

4. Gold Prices Lock
• Gold prices lock in some fresh gains above
$1,770 amid a recent pullback in the
greenback.
• The US benchmark Treasury yields trade lower
at 1.57% with 0.57% losses, which weigh on
the greenback.
• A lower USD valuation enhances the appeal
of the precious metal for the other currencies
holders.

5. Gold Prices Score More
• Gold prices score more than 0.50% on Tuesday
amid concerns about the patchy global growth
recovery.
• The weak US Factory Output and China’s slower
growth in Q3 added to the optimism surrounding
the precious metal.
• In addition to that, the Reserve Bank of
Australia’s (RBA) latest monetary policy minutes
highlighted the risk of the Delta COVID-19 variant
on the country’s economic recovery.

6. The World’s Second-largest Gold
Consumer
• Furthermore, India, the world’s second-largest
gold consumer, recorded a jump of 252% in its
gold's import to $24 billion in the April-
September period as the festive demand
picking up amid easing coronavirus
restrictions.
• Gold edged higher during the Asian session on
Tuesday and moved back above the $1,770
level in the last hour.

7. The US Dollar
• The XAU/USD, for now, seems to have
snapped two days of the losing streak and was
supported by a combination of factors.
• The uptick was sponsored by the emergence
of fresh selling around the US dollar, which
tends to benefit dollar-
denominated commodities, including gold.

8. The USD Met With Some Fresh Supply
• Following the previous day's good two-way
price moves, the USD met with some fresh
supply amid a modest pullback in the US
Treasury bond yields.
• This, in turn, was seen as a key factor that
acted as a tailwind for the dollar-denominated
commodity.

9. Additional Support To The Safe-haven
Precious Metal
• Apart from this, a generally softer tone around
the equity markets extended additional
support to the safe-haven precious metal.
• Worries that the recent widespread rally in
commodity prices will stoke inflation and
derail the global economic recovery continued
weighing on investors' sentiment.

10. Hawkish Signals By Major Central
Banks
• The market concerns were further fueled by
Monday's disappointing Chinese macro data,
showing that the economic growth
decelerated sharply from 7.9% to 4.9% during
the third quarter.
• That said, hawkish signals by major central
banks might hold traders from placing
aggressive bullish bets around the non-
yielding gold and cap gains.

11. Expected Rise In Inflation
• Market participants seem convinced that
the Fed will begin rolling back its massive
pandemic-era stimulus by the end of this year.
• Investors have also started pricing in the
possibility of an interest rate hike in 2022
amid fears about a faster than expected rise in
inflation.

12. Appreciating Move For Gold
• Adding to this, the Bank of England Governor
Andrew Bailey sent a fresh signal that the British
central bank is gearing up to raise interest rates
to counter growing inflation risks.
• Growing market acceptance about the prospects
for a policy tightening by the Fed/BoE warrants
some caution before positioning for any further
appreciating move for gold.

13. Trading Opportunities Around Gold
• There isn't any major market-moving economic
data due for release on Tuesday, leaving gold at
the mercy of the broader market risk sentiment
and bond yields.
• That said, scheduled speeches by BoE MPC
Member Catherine Mann and Governor Andrew
Bailey might provide some impetus to gold.
• Later during the US session, comments by Fed
Governor Michelle Bowman will influence the
USD price dynamics and produce some
meaningful trading opportunities around gold.

14. Technical Outlook
• From a technical perspective, last week's
sharp rejection slide from the 100/200-day
SMA confluence near the $1,800 mark stalled
near the $1,760 static support.
• This makes it prudent to wait for some follow-
through selling before confirming that the
recent move up has run out of steam and
placing fresh bearish bets.

15. Technical Outlook - I
• The next relevant support is pegged near the
$1,750 region, below which gold prices could
accelerate the fall towards September
monthly swing lows, around the $1,722-21
zone.
• On the flip side, immediate resistance is
pegged near the $1,780-82 region, which if
cleared decisively should allow bulls to make a
fresh attempt to conquer the $1,800 mark

16. Technical Outlook - II
• Some follow-through buying has the
potential to lift the XAU/USD back
towards the $1,832-34 heavy supply
zone.
• The $1,810 area, followed by the $1,818
region could act as an intermediate
hurdle on the way up.

17. Gold Daily Chart

18. Fundamental Overview
• Gold price is rebounding 1% so far this Tuesday,
reversing half the sell-off seen since Friday, as
bulls aim for the $1800 barrier once again.
• The relentless decline in the US dollar across the
board is helping gold price stage an impressive
turnaround.
• The risk-on flows are weighing heavily on the
dollar’s safe-haven demand, underpinning gold
price.

19. Fundamental Overview - I
• Expectations of strong corporate earnings
reports from the US, especially from the tech
sector, has overshadowed the concerns over
rising inflation and global economic growth.
• The retreat in the US Treasury yields is also
boding well for gold price amid a data-light
Tuesday.

20. Gold Price Forecast: XAU/USD Eyes
$1,780 Amid Recent USD Weakness

21. Thanks For Listening
Gold Price Forecast: XAU/USD Eyes
$1,780 Amid Recent USD Weakness