XAU/USD To Sink Towards $1,750 On A Break Below $1,785

1. XAU/USD To Sink Towards $1,750
On A Break Below $1,785

2. Points To Be Discussed Today:
• Higher Inflation Could Persist For Some Time
• Gold Looks Side-lined Near $1,800/Oz
• Gold Fundamental Overview
• XAU/USD Jumps Above Range On Falling
Yields, Eyes $1820
• Gold Prices Are Rising
• Gold Price Short-term Technical Outlook

3. Higher Inflation Could Persist For
Some Time
• XAU/USD holds in a familiar trading range
below $1,800.
• Investors look forward to the US CPI report
for some impetus ahead of the FOMC policy
meeting.
• “A stronger US CPI report will reaffirm marked
expectations for an imminent Fed taper
announcement.

4. XAU/USD
• This would be enough to trigger a fresh leg up
in the US bond yields, which should provide
an additional boost to the already stronger
greenback.
• This, in turn, will play a key role in influencing
the XAU/USD ahead of the crucial FOMC
monetary policy meeting on September 20-
21.”

5. Convincing Break Below
• “The $1,785-84 region might continue to
protect the immediate downside.
• A convincing break below will be seen as
a fresh trigger for bearish traders and set
the stage for a deeper retracement to the
$1,750 level.”

6. Short Covering Moves
• “The $1,800-05 area now seems to have
emerged as immediate strong resistance and
is closely followed by the very important 200-
day SMA, around the $1,808 zone.
• A sustained move beyond might prompt some
short-covering move and lift the metal back
towards the $1,832-34 supply zone.”

7. Further Consolidation Likely
• Open interest in gold futures markets rose by
just 708 contracts at the beginning of the
week considering preliminary readings from
CME Group, extending the choppy activity
seen as of late.
• On the flip side, volume shrank for the second
session in a row, this time by around 18.1K
contracts.

8. Gold Looks Side-lined Near $1,800/Oz
• Gold started the week on a positive note and
extended the erratic performance for another
session, always a tad below the $1,800 mark
per ounce troy.
• The precious metal kept the familiar range
amidst rising open interest, hinting at the idea
that further consolidation remains on the
cards.

9. Gold Spot

10. Gold Fundamental Overview
• Gold edged lower during the early part of the
European session and dropped to fresh daily lows,
around the $1,788 region in the last hour.
• Expectations for an imminent Fed taper
announcement and a modest uptick in the US Treasury
bond yields turned out to be a key factor that exerted
some pressure on the non-yielding yellow metal.
• However, worries about the fast-spreading Delta
variant of the coronavirus and a global economic
slowdown might lend some support to the traditional
safe-haven XAU/USD.

11. Gold Fundamental Overview - I
• Apart from this, some follow-through US dollar
pullback from two-week tops touched in the previous
day could act as a tailwind for dollar-denominated
commodities, including gold, and help limit losses.
• The USD bulls preferred to move on the sidelines and
wait for fresh clues about the likely timing of the Fed's
tapering plan.
• Hence, the market focus will remain glued to the latest
US consumer inflation figures for August, due for
release later during the early North American session.

12. Gold Fundamental Overview - II
• The data will play a key role in influencing the
USD price dynamics and provide some
meaningful impetus to gold ahead of the
FOMC policy meeting on September 20-21.
• In the meantime, the XAU/USD seems more
likely to prolong its consolidative price action
and remain confined in a familiar trading
range held over the past one week or so.

13. Gold Fundamental Overview - III

14. XAU/USD Jumps Above Range On
Falling Yields, Eyes $1820
• US Treasury yields fall sharply after US
inflation data on Tuesday.
• A mixed US dollar and risk aversion keeps gold
limited to the upside.
• XAU/USD short-term outlook is now bullish
while above $1,803.

15. XAU/USD Outlook

16. Gold Prices Are Rising
• Gold prices are rising on Tuesday, after
rebounding from monthly lows boosted by a
slide in US yields.
• The ounce is up by 0.70% and reached at
$1,808.65, the highest level in a week.
• From the top, it pulled back modestly, holding
so far above $1,800.
• At the same time, the DXY falls 0.10% but is
off lows.

17. The Consumer Price Index
• The key event on Tuesday was the US inflation report.
The Consumer Price Index rose in August 0.3%, below
the 0.4% expected.
• Also, core inflation rose below market consensus. The
numbers activated a sell-off in bonds ahead of next
week’s FOMC meeting.
• The 10-year yield dropped from 1.35% to 1.26%, hitting
the lowest intraday level since August 24.
• More US data will be released during the week,
including retail sales that will continue to affect market
expectations about what the Fed might announce.

18. Gold Price Short-term Technical
Outlook
• Gold broke the $1,795 area and jumped above
$1,800. It is hovering around a resistance area
at $1,809 with the positive momentum intact.
• A break above $1,810 should lead to more
gains in the short term. The critical resistance
above continues to be the monthly high
around $1,833.
• If the yellow metal breaks the mentioned
area, the next target is seen at $1,850.

19. Gold Price Short-term Technical
Outlook - I
• A retreat below $1,795 in XAU/USD would put the
price back into the previous range between $1,780 and
$1,800, and the downside risks would increase.
• There is an intermediate support around $1,790, and
then comes the lower bound of the range at $1,780
that is the critical support.
• If the support area around $1,780 gives up, it could
spark volatility and a quick slide to test the next
support at $1,770.
• Support levels: 1,798 1,780.00 1,769.50 1,760.00
1,747.00
• Resistance levels: 1,809.60 1,820.00 1,833.50

20. XAU/USD To Sink Towards $1,750
On A Break Below $1,785

21. Thanks for listening
XAU/USD To Sink Towards $1,750 On
A Break Below $1,785