Gold ended the week little changed as investors reacted to the Federal Reserve's revised projections showing interest rate hikes could begin in 2022 rather than 2023. Gold fell sharply after the FOMC meeting acknowledged inflationary pressures will likely persist and signaled tapering of asset purchases could start in November. Technically, gold is at a critical support level, where its low this week matched both the 38.2% and 61.8% Fibonacci retracements from longer-term data sets, representing an important Fibonacci harmonic that makes this price point more significant.

1. Gold Trades To A Critical Price
Support Level This Week

2. Points To Be Discussed Today:
• Gold Prices Ended The Week With Little Change.
• Gold Investors Revised “Dot Plot”.
• Gold’s Strong Bearish Reaction.
• Gold Was Trading High And Reached An Apex.
• GOLD SPOT / U.S. DOLLAR.
• XAUUSD Chart

3. Gold Prices Ended The Week With
Little Change
• Gold prices ended the week with little change
on the day, and little change when compared
to last Friday’s close.
• Gold futures basis the most active December
2021 contract is currently fixed at $1750.60,
which is a net gain of $0.80 (+0.05%) on the
day.

4. Gold Futures Did Trade
• Gold futures did trade with a lower high
and a higher low when compared to
yesterday’s trading range.
• The largest decline occurred yesterday, a
delayed reaction to Wednesday’s
conclusion of this month’s FOMC
meeting.

5. Gold Futures Trade Chart

6. Gold Dramatically Lower
• The fundamental event that pressured gold
dramatically lower yesterday was the release
of the FOMC meeting statement and
Chairman Powell’s press conference.
• In terms of when the Federal Reserve will
begin to taper, the statement acknowledged
that tapering will begin “soon”.

7. The Federal Reserve
• It is now believed that an announcement
as to when the Federal Reserve will begin
the process of tapering their monthly
asset purchases will be in November.
• It is also widely believed that tapering
could begin as early as December.

8. Gold Investors Revised “Dot Plot”
• However, the news that startled market
participants and gold investors was the
newly revised “dot plot”, which shows
the projections of interest rate
normalization.
• The most recent projections revealed
that there could be an interest rate hike
next year rather than 2023.

9. The Federal Reserve Acknowledged
Inflationary Pressures
• The Federal Reserve has made it emphatically
clear that their timeline to begin tapering, and
their timeline to initiate lift-off of interest rate
normalization have different criteria.
• The Federal Reserve also acknowledged that
inflationary pressures will probably be
sustained for a longer period than the most
recently projected.

10. Inflationary Pressures Continued To
Mount
• The Fed has been focusing on maximum
employment rather than inflationary
pressures, both of which compose their
primary dual mandate.
• Inflationary pressures continued to
mount as indicated by the release this
month of the August CPI

11. The Consumer Price Index
• It indicated an increase of 0.3% from July to August.
The report from the Bureau of Labor Statistics also
indicated that inflation has risen to 5.3% for the 12
months ending in August 2021.
• “The Consumer Price Index for All Urban Consumers
(CPI-U) increased 0.3 percent in August on a seasonally
adjusted basis after rising 0.5 percent in July, the U.S.
Bureau of Labor Statistics reported today.
• Over the last 12 months, the all items index increased
5.3 percent before seasonal adjustment.”

12. Gold’s Strong Bearish Reaction
• It is this report that is most likely the
underlying rationale for the Federal Reserve
moving up their timeline for liftoff when they
will raise interest rates for the first time since
the onset of the pandemic over 20 months
ago.
• Gold’s strong bearish reaction to the potential
for interest rates rising quicker than the
Federal Reserve had projected previously.

13. A Fibonacci Harmonic’s Between Two
Data Sets
• This is because higher interest rates intrinsically
increase the opportunity of holding gold which
yields no interest gains to the investor.
• Gold is currently very susceptible to lower pricing
and on a technical basis is at a key and critical
level.
• Our technical studies indicate a Fibonacci
harmonic’s between two data sets, one created
from daily charts, and the other created from
weekly charts.

14. A Fibonacci Harmonic’s Between Two
Data Sets - I

15. Gold Was Trading High And Reached
An Apex
• The longest data set begins in October
2018 when gold was trading at $1171, up
to the current record high achieved in
August of last year when gold reached an
apex of $2088.
• Currently, gold’s low this week matched
the 38.2% Fibonacci retracement of this
long data set.

16. A Fibonacci Harmonic’s
• It also matched the 61.8% Fibonacci
retracement which was created from a daily
chart.
• A Fibonacci harmonic’s occurs when two
different data sets have the same price point
for one of the key Fibonacci numbers.
• This makes that price point a much more
critical level on a technical basis.

17. A Fibonacci Harmonic’s - I

18. GOLD SPOT / U.S. DOLLAR

19. XAUUSD Chart

20. Gold Trades To A Critical Price
Support Level This Week

21. THANKS FOR LISTENING
Gold Trades To A Critical Price
Support Level This Week