- The document discusses whether gold prices can break above $1830, as inflation fears continue. It notes that gold has been consolidating between $1725-1830 despite high inflation. - While gold has risen in a short-term bullish channel, breaking above $1830 resistance would be needed to favor further gains. Weak US economic data could also boost gold by dampening expectations of early Fed rate hikes. - The document analyzes technical indicators for gold and EUR/USD, noting resistance levels to watch on gold's move higher. It concludes that gains for gold remain capped as the stronger US dollar offsets inflation-driven buying interest.

1. Gold: Can It Break $1830 On
Inflation Fears?

2. Points To Be Discussed Today:
• Inflation Expectations For Next Year
• Gold Has Been Rising In A Short-term Bullish
Channel
• How To Trade With FOREX.Com
• Two Trades To Watch: EUR/USD, Gold
• Gold Struggles At 1800
• Where Next For Gold Prices?
• Gold Up, But Gains Capped By Stronger Dollar

3. Inflation Is Rising
• The recent data and interest in rising inflation has
done little to boost the yellow metal...
• Signs of inflation abound for the global
economy, from the anecdotal (Twitter CEO Jack
Dorsey proclaiming that “Hyperinflation…[is]
happening”) to the tangible (the Bank of Canada
unexpectedly winding down its QE program and
dramatically raising its inflation expectations for
next year.

4. Inflation Expectations For Next Year
• Unfortunately for those who are bullish on the
gold, the textbook “inflation hedge”, the recent
data and interest in rising inflation has done
little to boost the yellow metal, which continues
to consolidate in its well-trodden 4-month range
between $1725 and $1830.
• Despite inflation running at its highest level in
decades in many major economies, gold is trading
lower over the past year and unchanged over the
last 15 months.

5. Gold Has Been Rising In A Short-term
Bullish Channel
• Don’t tell that to our traders though: Among
traders with an open position on gold, a
comically lopsided 91% of StoneX retail volume
is long the precious metal, up from less than 70%
at this time last week.
• From a technical perspective, gold has been rising
in a short-term bullish channel since bottoming
near $1725 support in late September, though it
remains flat on the week so far.

6. Short-Term Bullish Channel

7. The Medium-Term Outlook
• Moving forward, there is potential for some
short-term strength toward the strong
resistance level at $1830 as long as that
bullish channel remains intact.
• But traders would need to see a break above
that level, ideally coinciding with a change in
the narrative around the precious metal, to
flip the medium-term outlook in favor of the
bulls.

8. Break Of Bullish Channel
• Meanwhile, given the strongly bullish
sentiment toward gold.
• A break of bullish channel support near
$1780 could lead to a rapid drop back to the
lower $1700s as traders abandon
accumulated long positions en masse.

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10. Two Trades To Watch: EUR/USD, Gold
• EUR/USD extends rebound from 15 month low.
• Gold struggles at 1800, US retail sales, consumer
confidence in focus.
• EUR/USD extends gains from 15 month low
• EURUSD is pushing higher, extending gains from
the previous session boosted by the risk on
mood.
• Fewer than expected US jobless claims & solid
banks earnings lifted sentiment capping USD.

11. Two Trades To Watch: EUR/USD, Gold - I
• However central bank divergence remains a
challenge for the pair with Fed set to start
tapering, whilst ECB has refrained from hinting on
when they might rein in support.
• The Euro zone trades balance is due, in addition
to inflation numbers from France & Italy.
• US retail sales in focus.
• Consumer spending expected to drop 0.2% MoM.
• Consumer confidence and Fed talk could also
drive the pair

12. The RSI Is Supportive
• EURUSD is rebounding off 1.1525 the 15-month low a
double bottom. The price has extended gains above
the multiweek descending trendline and the 50 sma on
the 4 hour chart.
• The RSI is supportive of further upside.
• Any move higher will need to retake the 100 sma at
1.1615 in order to extend the recovery towards 1.1640
the October high and 1.1690 the high September 28th.
• On the flip side a move below the 50 sma at 1.1570
could open the door to a retest of the 15 month low at
1.1525.

13. U.S. Dollar

14. Gold Struggles At 1800
• Gold struggles at 1800, US retail sales, consumer
confidence in focus
• Gold is set to book gains this week over around 2.5%, its
biggest weekly rise since May. The move higher in gold
comes the week that inflation rose to 5.4% YoY and the
minutes to the FOMC revealed that the Fed looks set to
start tapering in November/ December.
• The Fed is likely to hike rates once next year beyond those
expectations are low.
• US retail sales and university of Michigan consumer
confidence could further drive the precious metal. Weak
data could dampen expectations of a Fed rate rise and lift
the precious metal.

15. Where Next For Gold Prices?
• Gold price is extending its rebound off 1724,
the October low. It trades with a two week
ascending channel and at the upper band of
this channel.
• The price is running into strong resistance at
1800, the round number, 100 sma, the upper
band of the rising channel and a multi-month
trendline resistance which could be a tough
nut to crack.

16. Where Next For Gold Prices? - I
• A move above here could see buyers gain
traction towards 1835 the September high.
• Rejection at this level could see the price slip
back to test 50 sma at 1777.
• A breakthrough here would expose the lower
band of the rising channel at 1760. A move
below 1646 horizontal support could see the
sellers gain traction.

17. Where Next For Gold Prices? - II

18. Gold Up, But Gains Capped By
Stronger Dollar
• Gold was up on Monday morning in Asia. However, a
strengthening dollar and data showing persistent
inflation that fueled bets of a sooner-than-expected
policy tightening by the U.S. Federal Reserve capped
the yellow metal's gains.
• Gold futures edged up 0.13% to $1,786.15 by 12:03
AM ET (4:03 AM GMT), remaining below the $1,800
mark after dropping to an over one-week low on
Friday.
• The dollar, which usually moves inversely to gold,
inched up on Monday after hitting its highest level
since Oct. 13 on Friday.

19. Gold Up, But Gains Capped By
Stronger Dollar - I
• U.S. data released on Friday challenged the Fed’s
position that current inflationary pressures are
temporary and will ease soon.
• The personal consumption expenditures price
index continued a run of inflation at levels not
seen in 30 years. It was at 4.4 year-on-year while
growing 0.3% month-on-month, in September.
• However, U.S. Treasury Secretary Janet Yellen said
on Friday that she still views inflation as a
temporary result of severe supply chain
bottlenecks, which will normalize in 2022.

20. Gold: Can It Break $1830 On
Inflation Fears?

21. Thanks for listening
Gold: Can It Break $1830 On
Inflation Fears?