XAU/USD Forecast And Gold Analysis

1. XAU/USD Forecast And GOLD
Analysis

2. Points To Be Discussed Today:
• Gold Continue To Move
• Gold Price Outlook
• XAU/USD Forecast And GOLD Analysis
• Gold Volatility And Gold Prices’ Abnormal Relationship
• GVZ (Gold Volatility) Technical Analysis
• Gold Price Rate Technical Analysis
• Gold Prices Established A Series
• Gold Client Positioning

3. Gold Continue To Move
• GOLD continue to move as part of the
correction and the formation of a large
inverted “Head and Shoulders” reversal
pattern on higher timeframes.
• At the time of the publication of the forecast,
the price of GOLD is 1759 Dollars per Troy Oz.
Moving averages indicate a short-term bearish
trend.

4. The Price Of Gold With A Potential
Target
• Prices broke through the area between the signal
lines upward, which indicates pressure from the
sellers of the asset and a potential continuation
of the fall from the current levels.
• At the moment, we should expect an attempt to
develop a decline and test the support level near
the 1745 area.
• Where can we expect a rebound and a continued
rise in the price of GOLD with a potential target
above the level of 1840.

5. The Relative Strength Index (RSI)
• An additional signal in favor of raising the
XAU/USD quotes will be a test of the support
area on the relative strength index (RSI).
• The second signal will be a rebound from the
upper border of the Wedge reversal pattern.
• Cancellation of the option to raise GOLD
prices on October 6, 2021 will be a fall and a
breakdown of the level of 1705.

6. XAU/USD Quotes With The Breakdown
• This will indicate a breakdown of the
support area and a continued fall to the
area below the level of 1675.
• Expect an acceleration of the rise in
XAU/USD quotes with the breakdown of
the resistance area and closing of the
price above 1785.

7. XAU/USD Forecast And GOLD Analysis
• XAU/USD Forecast and GOLD analysis October 6,
2021 implies an attempt to test the support area
near the level of 1745.
• Further, the growth of quotations with a target
above the level of 1840 will continue.
• This will indicate a breakout of the support area
and cancellation of the pattern.
• In this case, we should expect the GOLD price to
continue to decline with a potential target below
the level of 1675.

8. Gold Price Outlook
• Skepticism remains around the rebound in gold
prices at the start of October as US Treasury
yields press higher.
• US debt ceiling concerns may be providing a tail
wind, but even in 2011 – when the US was
stripped of one of its ‘AAA’ ratings – the gold
price rally didn’t last for more than a few weeks.
• According to the IG Client Sentiment Index, gold
prices have a mixed bias in the near-term.

9. Difficult To Have Faith
• While October has been an historically bullish
month for gold prices thanks in part to reduced
risk appetite elsewhere, October 2021 has
brought a mix of fears of a US default as well as a
potential slowdown in China’s property market
thanks to Evergrande.
• But rising inflation pressures seem to be the
more prominent factor in holding back gold
prices, insofar as long-end US Treasury yields
continue to rise, reducing the appeal for precious
metals.

10. The FOMC Continues To Offer Clear
Signals
• While US debt ceiling breach concerns may
percolate for a few more weeks, it doesn’t
seem like they will remain a potent catalyst for
a significant period of time.
• The fact remains that as the FOMC continues
to offer clear signals that tapering is arriving
soon, gold prices continue to trade into
fundamental headwinds that are unlikely to
break in their favor.

11. Gold Volatility And Gold Prices’
Abnormal Relationship
• Historically, gold prices have a relationship with
volatility unlike other asset classes.
• While other asset classes like bonds and
stocks don’t like increased volatility – signaling
greater uncertainty around cash flows, dividends,
coupon payments, etc. – gold tends to benefit
during periods of higher volatility.
• The persistent negative correlations suggest gold
prices may stills see difficult trading conditions.

12. GVZ (Gold Volatility) Technical Analysis: Daily
Price Chart (October 2020 To October 2021)

13. Relationship Between Gold Prices
And Gold Volatility
• Gold volatility(as measured by the Cboe’s gold
volatility ETF, GVZ, which tracks the 1-month
implied volatility of gold as derived from the
GLD option chain) was trading at 16.52.
• The relationship between gold prices and gold
volatility continues to evolve in a
fundamentally atypical manner.

14. The 5-Day Correlation
• The 5-day correlation between GVZ and
gold prices is -0.70 while the 20-day
correlation is -0.84.
• One week ago, on September 28, the 5-
day correlation was -0.47 and the 20-day
correlation was -0.84.

15. Gold Price Rate Technical Analysis: Daily Chart
(July 2020 To October 2021)

16. Gold Prices Established A Series
• Gold prices established a series of ‘lower lows’
throughout September, and the rebound thus far in
October has not broken that trend.
• The recent rebound has found itself pausing at a
confluence of technical resistance: the 50% Fibonacci
retracement of the 2020 low/2021 high range at
1763.36; and the daily 21-EMA.
• Daily MACD remains below its signal line, though daily
Slow Stochastics have returned to their median line. It
remains the case that “a drop below 1700 in the next
few weeks – particularly if the US debt ceiling deadline
passes without issue – is very much on the table.”

17. GOLD PRICE TECHNICAL ANALYSIS: WEEKLY
CHART (OCTOBER 2015 TO OCTOBER 2021)

18. Gold Prices’ Technical Structure
• Gold prices’ technical structure on the weekly
timeframe remains weak in spite of the recent
rebound on lower timeframes.
• The weekly 4-, 13-, and 26-EMA envelope’s
negative slope remains in place, while weekly
MACD continues to drop further below its signal
line.
• Weekly Slow Stochastics are holding at the
median line, however.
• For now, the outlook persists that “selling the
rally may be the modus operandi henceforth.”

19. Gold Client Positioning

20. XAU/USD Forecast And GOLD
Analysis

21. Thanks for listening
XAU/USD Forecast And Gold
Analysis