XAU/USD Remains On The Defensive Near $ 1800 Mark

1. XAU/USD Remains On The
Defensive Near $1800 Mark

2. Points To Be Discussed Today:
• Gold Snaps Two-day Uptrend
• Gold Struggled To Capitalize
• Gold Prices Stall Gains
• Gold Takes Cues From The Major Central
Bank’s
• Gold (XAU/USD)
• Gold Technical Analysis
• Gold Price & Chart

3. Gold Snaps Two-day Uptrend
• Gold snaps two-day uptrend to
consolidate the biggest daily jump in a
week.
• US Treasury yields recover after declining
the most since mid August.
• US Inflation data fails to tame the
tapering chatters despite easing in
August.

4. Gold Struggled To Capitalize
• Gold struggled to capitalize on the previous
day's post-US CPI strong move up from two-
week lows and faced rejection near the very
important 200-day SMA on Wednesday.
• The modest intraday pullback dragged the
XAU/USD to fresh daily lows during the early
European session, though lacked follow-
through below the $1,800 mark.

5. Gold Struggled To Capitalize - I
• A positive risk tone, along with a modest
uptick in the US Treasury bond yields, acted as
a headwind for the non-yielding yellow metal,
though a combination of factors helped limit
the downside.
• Tuesday's softer-than-expected US consumer
inflation figures eased fears for an earlier
tapering by the Fed.

6. A Global Economic Slowdown
Extended
• Apart from this, worries about the fast-spreading Delta
variant and a global economic slowdown extended
some support to traditional safe-haven assets,
including gold.
• The market concerns were further fueled by
Wednesday's disappointing Chinese macro data, which
underscored recent signs of slackening economic
momentum in the world's second-largest economy.
• This, in turn, warrants some caution for bearish
traders.

7. Gold Prices Stall Gains
• Gold prices stall gains near $1,800 after hitting a
one-week high on Tuesday.
• The drop in the US benchmark US Treasury yields
supported the current upside movement in the
prices the previous day.
• The movement was primarily sponsored after
the softer-than-expected rise in US Inflation data
revealed yesterday, which raised the doubts over
the Fed’s timeline to taper monetary stimulus.

8. Gold Takes Cues From The Major
Central Bank’s
• Weaker equity market and concerns on the
rapid spread of the coronavirus delta variant
and its impact on the global economic
recovery continue to lend support near the
lower levels.
• Gold takes cues from the major central bank’s
views on tapering and economic stimulus.

9. The US dollar & Precious Metal
• The strength of the US dollar keeps
the precious metal gains under
check.
• A higher USD valuation makes gold
expansive for other currencies
holders.

10. Gold (XAU/USD)
• Gold (XAU/USD) fades the strongest run-up in a
week above $1,800, down 0.15% intraday around
$1,801, during Wednesday’s Asian session.
• The yellow metal jumped to the week’s high, also
broke the monotony surrounding $1,800, after
the US Consumer Price Index (CPI) miss
clouded Fed tapering concerns the previous day.
• Even so, a recheck of the details suggests that
the inflation figures are high enough to favor Fed
hawks when they meet the next week.

11. The US CPI Dropped
• The US CPI dropped the most since January on
monthly basis to 0.3% versus 0.4% expected and
0.5% prior.
• The CPI ex Food & Energy also dropped below
0.3% expected and previous readings to 0.1%
during August, marking the biggest fall in six
months.
• Fed’s readiness to accept a bit higher inflation
figures, terming it ‘transitory’, seems to be at test
with almost double YoY figures than the US
central bank’s previous target range of near 2.0%.

12. US Treasury Yields Dropped
• Following the key data release, the US 10-
year Treasury yields dropped the most in a
month before recently recovering to 1.29%.
• It should be noted that the S&P 500 Futures
print mild gains by the press time even as the
Wall Street benchmarks closed in the red the
previous day.

13. The Fed Tapering & Geopolitical
Tensions
• In addition to the re-think over the Fed tapering, covid
woes and geopolitical tensions also weigh on the
market sentiment, underpinning the safe-haven
demand of the US Treasury bonds, which in turn weigh
on its yields.
• Although the virus numbers from the Asia-Pacific
region have eased of late, slower jabbing and doubts
over the Delta variant spread challenge the market
sentiment.
• Also weighing on the risk appetite, as well as gold, are
hurricanes in the US and political tension in Canada
and the Middle East.

14. Gold Traders Keeps There Eyes On
More Clues
• Looking forward, gold traders will keep their
eyes on the more clues to confirm the next
week’s tapering from the Fed.
• The same highlights Thursday’s Retail Sales
and Friday’s Michigan Consumer Confidence.
• For today, risk catalysts and the US Industrial
Production for August, expected to ease from
0.9% to 0.5%, could offer intermediate moves.

15. Gold Prices Failed To Provide A Daily
Closing
• Despite crossing an immediate trading range
between $1,782 and $1,804, gold prices failed
to provide a daily closing beyond the 200-
DMA level near $1,809.
• Also challenges the gold buyer is the sluggish
MACD and RSI conditions, as well as double
tops surrounding $1,834.

16. Gold Remains Firmer
• Meanwhile, 61.8% Fibonacci retracement of July-
August fall, around $1,777, adds to the downside
filters, other than the multiple lows marked
recently near $1,782.
• It’s worth observing that five-week-old horizontal
support of around $1,758 will challenge gold
bears below $1,777.
• Overall, gold remains firmer but needs to cross
the 200-DMA for giving controls to the bulls

17. Gold: Daily chart

18. Gold Price

19. Gold Chart

20. XAU/USD Remains On The
Defensive Near $1800 Mark

21. Thanks for listening
XAU/USD Remains On The Defensive
Near $1800 Mark