XAU/USD Edges Higher On Weaker USD, Lacks Bullish Conviction

1. XAU/USD Edges Higher On Weaker
USD, Lacks Bullish Conviction

2. Points To Be Covered Today:
• Gold Price Retreats
• Gold Reversed An Intraday Dip
• Gold Price Is Consolidating
• Gold Price Halts Its Recovery Mode
• Gold Price: Key Levels To Watch
• Gold Price Looks To Resume The Downside After
Monday’s Rebound
• GOLD SPOT / U.S. DOLLAR
• XAUUSD Chart

3. Gold Price Retreats
• Gold price retreats towards six-week
lows, downside favored.
• USD holds weaker amid improved risk
sentiment, yields firm up.
• Gold bears in driver's seat as focus shifts
to FOMC.

4. Gold Reversed An Intraday Dip
• Gold reversed an intraday dip to the $1,758
region and has now moved into the positive
territory for the third successive day.
• The US dollar extended the previous day's
retracement slide from the highest level since
August 23 and remained on the defensive
through the first half of the trading action on
Tuesday

5. Modest Lift To Dollar
• This, in turn, was seen as a key factor
that provided a modest lift to dollar-
denominated commodities, including
gold.
• However, a combination of factors kept a
lid on any meaningful upside and warrant
some caution before positioning for any
further appreciating move.

6. Non-yielding Yellow Metal
• The risk-on impulse – as depicted by a strong
rally in the global equity markets – acted as a
headwind for the safe-haven gold.
• This, along with expectations for an imminent
Fed taper announcement, triggered a fresh leg
up in the US Treasury bond yields and further
collaborated to cap gains for the non-yielding
yellow metal.

7. The XAU/USD Has Already Bottomed
• Investors also seemed reluctant to place any
aggressive bets, rather preferred to wait for a
fresh catalyst from the outcome of a two-day
FOMC meeting starting this Tuesday.
• Hence, it will be prudent to wait for a strong
follow-through buying before confirming that
the XAU/USD has already bottomed out in the
near term.

8. Influencing The USD Price Dynamics
• The Fed is scheduled to announce its decision
on Wednesday and is widely anticipated to
leave its monetary policy settings unchanged.
• Hence, investors will look for clues about the
likely timing when the Fed would begin rolling
back its massive pandemic-era stimulus.
• This will play a key role in influencing the USD
price dynamics and provide a fresh directional
impetus to gold.

9. Gold Price Is Consolidating
• Gold price is consolidating Monday’s rebound,
as the bulls turn cautious heading into the
two-day FOMC meeting that begins later this
Tuesday.
• Expectations of Fed’s tapering plan remain
alive and kicking tempering the mood around
gold investors.

10. Gold Price Halts Its Recovery Mode
• Meanwhile, easing China's Evergrande scare has
led to improvement in the risk sentiment, lifting
the US Treasury yields at gold’s expense.
• However, gold buyers continue to find support
from a broad-based US dollar retreat, thanks to
the calm market tone.
• Gold price halts its recovery mode after the bulls
ran into stiff resistance near the $1767-$1768
region, as the six-week lows at $1742 continue to
lure the sellers amid hawkish Fed’s expectations
and a data-light US docket.

11. Gold Price: Key Levels To Watch
• The Technical Confluences Detector shows
that gold price struggles around a bunch of
healthy resistance levels near $1762-$1763.
• That level is the convergence of the Fibonacci
23.6% one-day and Fibonacci 23.6% one-week.
• Acceptance above the latter could challenge the
range highs near $1768-$1770, which is the
intersection of the Fibonacci 38.2% one-week and
SMA100 one-hour.
• Further up, the SMA5 one-day at $1774 will test
the offers on the road to recovery.

12. Gold Price: Key Levels To Watch - I
• The Fibonacci 61.8% one-month at $1778 would
guard the further upside.
• Alternatively, if the bulls fail to resist above $1760
support, then a drop towards the confluence of
the Fibonacci 38.2% one-day and Bollinger Band
one-hour lower at $1757 cannot be ruled out.
• The Fibonacci 61.8% one-day at $1752 could
emerge as minor support, below which the
downside will open up towards $1742, the
previous day’s low and the Fibonacci 38.2% one-
month.

13. Here Is How It Looks On The Tool

14. Gold Price Looks To Resume The
Downside After Monday’s Rebound
• “A minor improvement in the risk
sentiment amid stabilizing Hong
Kong equities and conciliatory comments
from China Evergrande Chief caps gold’s
recovery gains.”
• “Fed’s tapering plan appears intact,
despite the latest China worries.

15. XAU/USD Will Likely Resume Its
Downside
• The risk rebound could pick up pace,
extending the rebound in the Treasury
yields while lifting the demand for the
greenback once again.
• In such a case, XAU/USD will likely
resume its downside.”

16. 21-Daily Moving Average
• “The 21-Daily Moving Average (DMA) is
set to pierce the 50-DMA from above.
• If such a move materializes, then it would
confirm a bear cross, opening floors for a
fresh downswing towards the multi-week
troughs near $1740.

17. Gold Bulls
• The $1700 psychological magnate will be on
the sellers’ radars should the monthly lows
give way.”
• “A sustained move above the $1767 supply
zone is needed to unleash the recovery gains
towards the 21 and 50-DMA confluence near
$1795.
• Gold bulls will then aim for the horizontal 200-
DMA at $1807, as the next upside target.”

18. GOLD SPOT / U.S. DOLLAR

19. XAUUSD Chart

20. XAU/USD Edges Higher On Weaker
USD, Lacks Bullish Conviction

21. THANKS FOR LISTENING
XAU/USD Edges Higher On Weaker
USD, Lacks Bullish Conviction