Gold Testing Long & Short Term Support

1. Gold Testing Long And Short-Term
Support

2. Points To Be Discussed Today:
• Gold Recently Broke
• Gold Daily Chart
• Gold 4-Hr Chart
• Gold Appears Unresponsive to Inflation Fears &
Tech Levels
• Inflation Concerns
• Bitcoin vs Gold
• Key Technical Levels To Watch: Gold
• Weekly Gold (XAU/USD) Chart

3. Gold Recently Broke
• Gold recently broke above the 200-day
moving average and June trend-line, an area
of confluence that had once kept a lid on
higher levels.
• The pullback the past couple of sessions is
bringing that area into play along with another
angle of support via a trend-line from the late
September low.

4. Former Level Of Resistance
• This is making for another confluent level that
makes this spot on the chart, seen on both the
daily and 4-hr, a very important one for the
upcoming days.
• A former level of resistance getting tested as
support is a common technical occurrence and
resistance turned support should be respected
be respected until broken.

5. The Multi-Week Trend Higher
• For would-be longs, this could offer an
attractive spot to enter the multi-week trend
higher towards a test of yet another area of
significant confluence in resistance.
• If support breaks then stops on longs would
get triggered, and for those looking to short a
break of support may usher in a leg lower.

6. The Confluent Trend-line
• On the top-side, if support holds, then look for
peaks created during July, August, and
September in the low 1830s to come into play,
along with the confluent trend-line running
down off the August 2020 high.
• That trend-line is part of a macro-sized wedge
that has been forming since last year.
• It could have big meaning as we head into
2022.

7. Gold Daily Chart

8. Gold 4-Hr Chart

9. Gold Appears Unresponsive to
Inflation Fears & Tech Levels
• XAU/USD ANALYSIS:
• Inflation continues to boost corporate
revenues as consumers are left to pick up the
tab
• Gold prices await the magnitude of major
central bank responses to inflation
• Gold techs: Identifying conditions for possible
directional moves

10. Gold’s Choppy Price Action
• If you were to analyze gold’s choppy price
action over the last three months and
compare that to the rapid rise witnessed in
July and August of last year.
• You may be wondering if there really is any
credibility to recent inflation fears.

11. Gold To Rise At A Rapid Rate
• While it is not entirely accurate to compare
current gold prices to those during the hard
lockdowns of the pandemic.
• It does however help make the point that gold
functions better as a long-term hedge against
inflation and doesn’t necessarily track inflation in
the short to medium-term.
• Those expecting gold to rise at a rapid rate, in
response to rising inflation expectations, may be
in for a long ride.

12. Inflation Concerns
• As major US companies report on their Q3
earnings, the issue of supply chain challenges and
expectations of increased input costs is becoming
apparent.
• General Electric CFO Carolina Dybeck Happe
mentioned that the company expects significant
[inflationary] pressure in 2022.
• 3M CEO Mike Roman also alluded to passing on
higher costs to consumers, admitting that
inflation effects have materialized way sooner
than anybody thought.

13. Bitcoin vs Gold
• Bitcoin looks to have captured a significant
amount of interest due to it being widely viewed
as an appreciating, speculative ‘asset’ and hedge
against inflation.
• Trader and hedge fund manager, Paul Tudor
Jones recently admitted that he prefers crypto
currencies to gold as an inflation hedge.
• Bitcoin has risen way beyond that of gold this
year, explaining why so many have opted for the
switch to the less traditional asset class.

14. Central Bank Response To Inflation
• Gold prices tend to respond to government bond
yields, like the US 10 year yield, which has
staggered higher in recent weeks as the market
anticipates eventual rate hikes.
• Such hikes impact negatively on the non-interest-
yielding yellow metal as the opportunity cost for
holding gold rises.
• With that being said, the US Federal Reserve is
still some way from hiking rates as the latest
summary of Fed projections now shows that
members anticipate a rate hike in 2022.

15. Central Bank Response To Inflation - I
• However, the Fed will first need to reduce
financial stimulus before a single rate hike is
considered (under normal circumstances) and
this allows for the possibility of short term
appreciation in gold if the November 4th Fed
meeting is viewed as bearish by the market.
• Tomorrow sees the ECB and BoJ provide updates
on their respective monetary policy meetings
regarding interest rates and stimulus measures.

16. Key Technical Levels To Watch: Gold
• From a technical point of view gold has a rather
bearish posture to it.
• After the 2020 high, the precious metal has made
successive lower highs and even broke below
long-term support, which it now looks to test.
• On the daily chart, gold has traded – for the most
part- in a sideways manner between the major
zones marked in blue at the 1836 level and in red
by the 1754 - 1764 zone.

17. Key Technical Levels To Watch: Gold - I
• Price action has been trading within a bullish channel
where a bounce off channel support could be
indicative of an attempt to break above the long term
trendline, towards 1835.
• A break and hold above 1835 would warrant a
reassessment of the larger bearish theme.
• On the other hand, a bounce lower off the long-term
trendline and break below the ascending channel
would bring the zone of support (1754 – 1764) into
focus.
• A break below the support zone provides further
support for bearish continuation setups.

18. Weekly Gold (XAU/USD) Chart

19. Gold Rises As The Dollar And Bond
Yields Fall; Fed Meeting Awaited
• Gold edged higher early on Wednesday as the U.S. dollar
and bond yields both weakened as the metal looks to retest
the US$1,800 mark
• Gold for December delivery was last seen up US$1.90 to
US$1,795 per ounce, after dropping a day earlier from a six-
week high of US$1,806.80.
• The price of the metal has been mostly range bound over
the past month as the market awaits word from the Federal
Reserve on when it will begin tightening monetary policy as
the country emerges from the pandemic.
• The central bank will meet next week, with the market
expecting an announcement on when it will begin to taper
off US$120 billion in monthly bond purchases.

20. Gold Testing Long And Short-Term
Support

21. Thanks for listening
Gold Testing Long And Short-Term
Support