The gold price is heading back towards the $1,870 resistance level as the US dollar retreats along with Treasury yields amid improving market sentiment. Gold bulls are bidding up ahead of the upcoming US retail sales data release, with technical indicators pointing to further gains. However, gains face challenges from the US dollar and Treasury yields, as well as expectations of an earlier Fed rate hike.

1. XAU/USD Looks To Retest $1,870
Ahead Of US Retail Sales

2. Points To Be Discussed Today:
• Gold Price Is Heading Back
• Gold Bulls Are Bidding Up
• Gold Technical Analysis
• Gold Daily Chart
• Gold Fundamental Overview

3. Yearly Resistance Line Challenge Gold
Buyers
• Gold struggles around five-month high,
retreats of late.
• US-China talks, indecision over Fed rate hike
and pre-data anxiety portray sluggish markets.
• DXY tracks Treasury yields to the north as
78.6% Fibonacci retracement, yearly
resistance line challenge gold buyers.

4. Gold Price Is Heading Back
• Gold price is heading back towards the key
$1,870 resistance zone, as the US dollar
retreats in tandem with the Treasury yields
amid improving market mood.
• Investors remain hopeful, with the virtual
meeting between US President Joe Biden and
his Chinese counterpart Xi Jinping underway.
• Both leaders look to ease the tense
relationship by pledging more communication.

5. Gold Bulls Are Bidding Up
• Additionally, gold bulls are bidding up ahead of
the critical US Retail Sales release, with the daily
technical setup pointing to more gains in the
offing.
• The 100-Daily Moving Average (DMA) is set to
cross the 200-DMA for the upside, signalling a
potential bull cross.
• Meanwhile, the persistent global inflationary
concerns and expectations of the Fed’s rate hike
timing continue to have a significant bearing on
the bright metal.

6. US Treasury Yields & US Dollar
• Gold (XAU/USD) takes offers to refresh intraday
low, following an uptick to refresh a five-month
high.
• That said, the yellow metal trades near $1,862 by
the press time of Tuesday’s Asian session.
• The commodity buyers initially cheered
upbeat market sentiment to renew the multi-day
top during early Monday before the heavy run-up
in the US Treasury yields and firmer US Dollar
dragged the gold prices.

7. The US 10-year Treasury Yields
• Also challenging the quote is the market’s
cautious mood ahead of the key US Retail
Sales for October, expected to reprint the 0.7%
MoM growth.
• That said, the US 10-year Treasury yields jumped
to a fresh three-week high, underpinning the
US Dollar Index rally to renew the yearly top.
However, the Wall Street benchmarks traded
mixed and restrict the initial moves of the S&P
500 Futures.

8. The US 10-year Treasury Yields - I
• Although optimism surrounding the US-China talks and
US stimulus favor the gold buyers, the Fed rate hike
concerns challenge the metal’s upside momentum.
• US President Joe Biden formally signed his $1.0 trillion
bi-partisan infrastructure bill but a 16-year high
number of the US inflation expectations keep reflation
woes on the top despite the Fed policymakers’
rejections.
• Recently, Richmond Federal Reserve Bank President
Thomas Barkin said, “If ‘need is there’ fed will act to
curb inflation, but good to have a few more months ‘to
see where reality is.’”

9. The Qualitative Factors & Gold Buyers
• Adding to the risk catalysts is the optimism
surrounding the US-China talks.
• That said, US President Joe Biden and his
Chinese counterpart Xi Jinping are up for a
virtual meeting after multiple months of
silence among the world’s top two economies.
• Moving on, the qualitative factors may keep
the gold buyers entertained, likely challenged,
ahead of the key US data.

10. • Despite refreshing the multi-day top, gold fails to
provide a daily closing beyond a descending trend line
from January and 78.6% Fibonacci retracement (Fibo.)
of June-August downside.
• In addition to the key Fibo. and the yearly resistance
line, overbought RSI conditions also challenge gold
buyers around the key $1,867-68 level.
• Also challenging the gold buyers past $1,868 is the
$1,900 threshold and June’s swing high near $1,917, a
break of which will test the yearly peak of $1,959.

11. Gold Technical Analysis - I
• Alternatively, pullback moves may aim for the
61.8% Fibonacci retracement level around
$1,830.
• Should gold sellers dominate past $1,830,
October’s high near $1,813 will be in focus.
• It’s worth noting that the tops marked in July and
September around $1,834 add to the downside
filters.
• To sum up, gold remains bullish but a pullback
can’t be ruled out.

12. Gold Technical Analysis - II
• From a technical perspective, the recent
strong move up witnessed over the past two
weeks or so stalled just ahead of a resistance
marked by a downward sloping trend-line.
• The mentioned barrier extends from
September 2020 swing highs and should now
act as a key pivotal point for short-term
traders.

13. Gold Technical Analysis - III
• Given that the RSI on the daily chart has
moved on the verge of breaking into the
overbought territory, it will be prudent to wait
for a convincing break through the trend-line
before placing fresh bullish bets.
• The XAU/USD might then accelerate the
momentum and aim to reclaim the $1,900
round figure before eventually darting to June
swing highs, around the $1,916-17 region.

14. Gold Technical Analysis - IV
• On the flip side, any meaningful pullback below the
$1,850 level would now be seen as a buying
opportunity.
• This, in turn, should help limit the downside near the
$1.834-32 strong horizontal resistance breakpoint.
Failure to defend the mentioned support levels might
trigger aggressive long-unwinding trade and turn gold
prices vulnerable to slide back towards the $1,800
mark.
• The $1,818-17 region and the $1,808-06 zone could act
as intermediate support levels on the way down.

15. Gold: Daily Chart

16. Gold Fundamental Overview
• Gold settled with modest losses on Monday,
snapping seven successive days of the winning
streak to a more than five-month highs.
• The downtick was exclusively sponsored by a
stronger US dollar, which tends to undermine the
dollar-denominated commodity.
• The greenback remained well supported by
acceptance for an early policy tightening by the
Fed and got an additional boost from upbeat US
macro data.

17. Gold Fundamental Overview - I
• The markets are pricing in the possibility for an
eventual Fed rate hike move by July 2022.
• Moreover, the Fed funds futures indicate a high
likelihood of another raise by November amid
rising inflationary pressure.
• It is worth recalling that data released last
Wednesday showed that US consumer prices in
October surged to the highest level since 1990.
• The data convinced investors that the Fed would
be forced to adopt a more aggressive policy
response to contain stubbornly high inflation.

18. Gold Fundamental Overview - II
• The expectations were reinforced by a fresh leg up in
the US Treasury bond yields, which further
underpinned the greenback and acted as a headwind
for the non-yielding yellow metal.
• On the economic data front, the Empire State
Manufacturing Index surpassed consensus estimates
and jumped to 30.9 in November from 19.8 previous.
• This further contributed to the greenback's overnight
strong move up, though the cautious market mood
helped limit losses for the traditional safe-haven
XAU/USD.

19. Gold Fundamental Overview - III
• Gold managed to find some support ahead of the
$1,855 region and edged higher during the Asian
session on Tuesday.
• Retreating US bond yields kept the USD bulls on the
defensive and turned out to be a key factor lending
some support to the commodity.
• The uptick, however, lacked bullish conviction amid a
generally positive tone around the equity markets.
Investors will keep a close eye on a key meeting
between US President Joe Biden and Chinese leader Xi
Jinping for some meaningful impetus.

20. XAU/USD Looks To Retest $1,870
Ahead Of US Retail Sales

21. Thanks for listening
XAU/USD Looks To Retest $1,870
Ahead Of US Retail Sales