XAU/USD Remains Pressured Near $ 1,800 Amid USD Recovery

1. XAU/USD Remains Pressured Near
$1,800 Amid USD Recovery

2. Points To Be Discussed Today:
• Gold Holds In A Critical Support
• Gold Prices Surrender
• Price Of Gold Is Flat Within Bullish Territory
• Gold Technical Analysis
• Gold Bulls Were Making Progress
• The Price Action
• Price Had Left A Tweezer Top

3. Gold Holds In A Critical Support
• Gold holds in a critical support structure
on the daily chart.
• XAU/USD leans with a bullish bias with
eyes on a break of $1,830.
• Lower US yields are supporting the
bullish bias and are weighing on the
greenback.

4. Gold Prices Surrender
• Gold prices surrender the previous
session's gains and struggle to defend the
$1,800 mark.
• The US 10-year Treasury yields rebound
from the early lower levels to trade at
1.55%, following the upcoming Bank of
Japan (BOJ) and the European Central
Bank (ECB) policy meetings on the day.

5. The US Dollar Trades
• The US dollar trades near 93.95, recovering from
the early session’s lows.
• A higher USD valuation makes gold more
expensive for the buyers holding other
currencies.
• Investors are gearing up for the Bank of Japan
(BoJ) and the European Central Bank
(ECB) monetary policy , although neither of the
central banks is likely to announce any change in
the policy.

6. Growth And Inflation
• Still, the forward guidance on growth and
inflation will be a key to set the market
tone.
• The Bank of Canada (BOC) ended its $2
billion per week quantitative easing (QE)
program while holding its key interest
rate steady at 0.25% on Wednesday.

7. Price Of Gold Is Flat Within Bullish
Territory
• Trading at $1,796, the price of gold is flat
within bullish territory on Thursday and
rides daily dynamic support near the 50-
day EMA.
• Gold is holding in a tight range mid-week
while global equity markets gave up
recent gains on Wednesday.

8. US Treasury Yields Fell
• It was a mixed session while US Treasury
yields fell to a two-week low as traders
weighed continued positive corporate results
and a resurgence in US-China tensions that
could compound supply-chain worries.
• Bonds also rallied overnight on the back of a
larger-than-expected reduction in UK bond
issuance (a cut was expected due to the UK
budget deficit coming in better than forecast).

9. US Government Bonds

10. The US Dollar Lost Value
• Consequently, the US dollar lost value against
major currencies as the Bank of Canada
started off a series of awaited central bank
policy comments with a hawkish tone.
• The outcome broke a calm that had settled
over the forex space this week and the
US dollar index met resistance in the
daily chart 93.70 was the low on the day.

11. The US Dollar Lost Value
• The Bank of Canada signaled it could hike
interest rates earlier than previously thought
and became the first central bank from a G7
country to exit quantitative easing.
• The BoC maintained guidance to leave rates
on hold until economic slack is absorbed, but
it now expects that to happen sometime in
the middle quarters of 2022 rather than in the
second half of 2022

12. Inflation Protection Continues To Prop
Up
• Markets will look to the ECB meets tonight.
• President Lagarde may have a difficult time
convincing markets to reverse rising
expectations of higher interest rates next
year.
• Meanwhile, the hunt for inflation protection
continues to prop up interest in the yellow
metal as real rates sink, analysts at TD
Securities said.

13. Inflation Is Supporting Gold
• “Ten year breakeven yields continue to firm at
their highest levels since 2012, as speculators
brace for inflation.
• While the interest in inflation is supporting
gold, global markets remain intensely focused
on pricing the Fed's exit, with the recent surge
in market-based inflation expectations also
fueling bets for an earlier Fed hike.''

14. Market Is Increasingly Pricing
• ''The market is increasingly pricing in a policy mistake
which is unlikely to take place, considering that central
banks are likely to look past these disruptions as their
reaction functions have been historically more
correlated to growth than inflation.
• In this sense, reasons to own the yellow metal are
growing more compelling as Fed pricing is likely to
unwind in the coming months,'' the analysts
explained.
• ''While this narrative has yet peaked, we expect a
deceleration in US economic activity, as a result of a
growing fiscal drag, to catalyze a repricing.''

15. Gold Technical Analysis
• From a daily perspective, the price has
been trying to move higher.
• ''$1,835 guards territory to $1,880 as
follows

16. Gold Technical Analysis - I

17. Gold Bulls Were Making Progress

18. The Price Action
• The price action on Tuesday, however, has moved in for a significant test of
the dynamic support as follows:

19. Price Had Left A Tweezer Top
• The price had left a tweezer top which indicated that the price
could move in for another test of the dynamic support and
the 21-day moving average:

20. XAU/USD Remains Pressured Near
$1,800 Amid USD Recovery

21. Thanks for listening
XAU/USD Remains Pressured Near
$1,800 Amid USD Recovery