Gold Weekly Forecast

1. Gold Weekly Forecast

2. Points To Be Discussed Today:
• Gold Started The New Week In A Calm Manner
• XAU/USD Stayed In A Consolidation Phase
• What Happened Last Week
• Gold Gathered Bullish Momentum
• XAU/USD Weakness
• Gold Technical Outlook

3. Gold Started The New Week In A
Calm Manner
• Gold shot higher on Friday but lost its traction.
• Neither sellers nor buyers have control of the
critical $1,800 level.
• First estimate of US Q3 GDP growth stands out in
a busy week.
• Following the sharp drop witnessed on Friday,
gold started the new week in a calm manner but
didn’t have a hard time capitalizing on the selling
pressure surrounding the greenback.

4. XAU/USD Stayed In A Consolidation
Phase
• After posting impressive gains on Wednesday,
XAU/USD stayed in a consolidation phase on
Thursday and continued to edge higher ahead
of the weekend.
• By surging beyond $1,800 on Friday, gold
attracted buyers but erased a large part of its
daily advance in a quick manner in the late
American session to end the week in the
positive territory above $1,790.

5. What Happened Last Week
• Disappointing growth data from China caused
the market mood to sour at the start of the
week and provided a boost to the dollar.
• However, the upbeat earnings figures from
large US banks on Monday helped Wall
Street’s main indexes gain traction and
allowed risk flows to dominate the financial
markets, limiting XAU/USD’s losses.

6. What Happened Last Week - I
• In the absence of high-tier macroeconomic
data releases, risk perception remained the
primary driver of financial markets on
Tuesday.
• Although the XAU/USD climbed above $1,780
on broad-based USD weakness – rising US
Treasury bond yields forced the pair to pare its
gains.

7. Gold Gathered Bullish Momentum
• As the rally in US stocks picked up steam mid-
week, gold gathered bullish momentum and
climbed to fresh weekly highs above $1,790.
• The data from the US on Thursday, showed
that the weekly Initial Jobless Claims fell to
the lowest level since March 2020 at 290,000
and the S&P 500 Index notched a new record
high of 4,551.

8. The Benchmark 10-year US Treasury
Bond Yield
• Towards the end of the week the benchmark 10-
year US Treasury bond yield pushed higher, but,
despite this, the dollar struggled to find demand
as a safe haven.
• Heightened optimism for US lawmakers reaching
a deal on US President Joe Biden's spending bill
and news of Chinese real-estate giant Evergrande
making a payment of $83.5 million on bond
interest lifted market mood as the week wound
to a close.

9. The Federal Reserve’s Blackout Period
• Ahead of the Federal Reserve’s blackout period,
which will start on October 23, several
policymakers voiced their support for tapering to
start as early as November, but market
participants paid little or no interest to these
comments.
• Cleveland Fed President Loretta Mester and Fed
Governor Randal Quarles both said that the test
for taper has been met, while Fed Governor
Christopher Waller argued that they may have to
act faster if inflation remains too high.

10. The Renewed Dollar Weakness
• Assisted by the sharp correction in the US T-bond
yields and the renewed dollar weakness on Friday,
XAU/USD broke above $1,800 and touched its highest
level since early September at $1,813.
• Profit-taking ahead of the weekend and FOMC
Chairman Jerome Powell's hawkish comments,
however, caused the pair to retrace its rally in the late
American session.
• Powell noted that they were expecting high inflation to
last well into the next year and added that it was time
to taper.

11. Consumer Confidence Index Data
• September New Home Sales and the
Conference Board’s October Consumer
Confidence Index data will be featured in
the US economic docket on Tuesday.
• The market reaction is likely to remain
muted with investors staying on the
sidelines ahead of key events.

12. The Inflation Spike
• On Thursday, the European Central Bank
(ECB) will announce its Interest Rate Decision and
release the Monetary Policy Decision Statement.
• Throughout last week, ECB officials reiterated
that the inflation spike in the euro area was
expected to be temporary and noted that they
would maintain the expansionary policy even
after the Pandemic Emergency Purchase
Programme (PEPP) ends in March.

13. XAU/USD Weakness
• Moreover, Bundesbank President Jens
Weidmann, a loud critic of the ECB’s dovish
policy, has announced his resignation at the
end of the year.
• In case the ECB event highlights the policy
divergence with the Fed, the greenback could
regather its strength and bring forth XAU/USD
weakness.

14. The US Bureau Of Economic Analysis
• More importantly, the US Bureau of Economic
Analysis will release its first estimate of third-
quarter Gross Domestic Product (GDP) growth.
• On a yearly basis, the GDP is expected to expand
by 3.2% following the 6.7% growth recorded in
the second quarter.
• Considering how the disappointing September
Nonfarm Payrolls data failed to alter tapering
prospects, a GDP reading near the market
consensus could trigger another leg higher in US
T-bond yields.

15. The US Bureau Of Economic Analysis
• The benchmark 10-year US T-bond yield stays
within a touching distance of the critical
1.75% mark and a break above that level could
open the door for additional dollar strength.
• On the other hand, a big miss could cause
investors to price in a delay in the reduction of
the Fed’s asset purchases and weigh heavily
on the dollar.

16. The Personal Consumption
Expenditures (PCE) Price Index
• Finally, the Personal Consumption
Expenditures (PCE) Price Index, the Fed’s
preferred gauge of inflation, will be the last
data release of the week to watch on Friday.
• However, this data by itself is unlikely to have
a significant impact on XAU/USD if the trend is
already set by the preceding events.

17. Gold Technical Outlook
• Although the Relative Strength on the
daily chart edged higher to 60, it's difficult to
say that the outlook is bullish unless gold
makes a decisive move above the
$1,795/$1,800 area.
• Where the Fibonacci 50% retracement of
April-June uptrend, 100-day SMA and the 200-
day SMA meet.

18. Gold Technical Outlook - I
• Above that hurdle, $1,825/30 area (Fibonacci
38.2% retracement of the April-June uptrend,
static level) could be seen as the next target
before $1,840 (static level).
• On the downside, $1,780 (50-day SMA) aligns as
the first support ahead of $1,770 (former
resistance, Fibonacci 61.8% retracement).
• Sellers are likely to maintain control of the action
as long as the above-mentioned resistance holds.

19. Gold Technical Outlook - II

20. Gold Weekly Forecast

21. Thanks for listening
Gold Weekly Forecast