The document discusses gold prices recovering from two-week lows of $1782 as the US dollar retraces. $1802 is a tough resistance level for gold bulls to break through on the road to recovery. Four macroeconomic scenarios are presented where gold is expected to perform well, particularly if inflation risks increase, virus cases escalate, or the US dollar weakens.

1. Gold: $1802 Is A Tough Nut To Crack
On Road To Recovery

2. Points To Be Covered Today:
• Gold Is Recovering
• $1802 Is A Tough Nut To Crack On Road To
Recovery
• The Rebound In Gold Price
• Gold Price: Key Levels To Watch
• XAU/USD Sets The Stage For Further Losses
Towards $1,750
• Gold To Perform In Most Macro Scenarios

3. Gold Is Recovering
• Gold price is looking to recover lost
ground while finding support near the
two-week lows of $1782 earlier on.
• The rebound in gold price comes on the
heels of a broad retracement in the US
dollar from the weekly tops.

4. $1802 Is A Tough Nut To Crack On
Road To Recovery
• Gold price attempts a tepid bounce from two-
week lows.
• Gold looks to regain $1800 and beyond, as
USD loses ground.
• Gold bulls remain in control following dismal
NFP data.
• Gold price is looking to recover lost ground
while finding support near the two-week lows
of $1782 earlier on.

5. The Rebound In Gold Price
• The rebound in gold price comes on the heels
of a broad retracement in the US dollar from
the weekly tops.
• Mounting economic growth concerns amid
the Delta covid variant contagion have
triggered a risk-off wave across the board,
which boosts the US Treasuries while knocking
off the yields.

6. The Bounce In Gold
• The weakness in the Treasury yields dragged
the greenback lower against it main peers,
prompting the bounce in gold.
• However, the further upside appears elusive in
gold price amid hawkish Fedspeak and a
potential tapering by the ECB at its policy
decision later this Thursday.

7. Gold Price: Key Levels To Watch
• The Technical Confluences Detector shows that
gold price is set to challenge powerful barrier at
$1798 on its road to recovery.
• That level is the confluence of the SMA50 one-day
and Bollinger Band one-day Middle.
• Further up, the intersection of the previous week’s
low, the previous day’s high and SMA100 four-
hour around $1800-$1802 will offer stiff resistance
to gold bulls.

8. Gold Price: Key Levels To Watch - I
• Recapturing the latter will open up doors
towards $1810, the critical resistance
comprising of the SMA200 one-day, pivot
point one-week S1 and SMA10 one-day.
• Meanwhile, the immediate downside remains
cushioned by the intersection of the Fibonacci
38.2% one-day, pivot point one-week S2 and
SMA5 four-hour at $1790.

9. Next Bearish Target
• The next bearish target for sellers is seen
at $1787, the Fibonacci 23.6% one-day.
• Further south, the confluence of the
previous day’s low and Fibonacci 161.8%
one-week at $1782 will be the level to
beat for gold bears.

10. Here Is How It Looks On The Tool

11. XAU/USD Sets The Stage For Further
Losses Towards $1,750
• Gold price is nursing losses near two-
week lows of $1782.
• The $1,775 area holds the key for
XAU/USD bulls, as FXStreet’s Haresh
Menghani notes.

12. XAU/USD Seems Vulnerable
• “Traders might further take cues from the release
of Weekly Initial Jobless Claims data from the US.
• Apart from this, scheduled speeches from a host
of Fed officials and the US bond yields might
influence the USD price dynamics.
• This, along with the broader market risk
sentiment, might provide some impetus to gold
and allow traders to grab some meaningful
opportunities.”

13. XAU/USD Seems Vulnerable - I
• “Weakness towards the next relevant
support, around the $1,775-74 region,
remains a distinct possibility.
• A convincing break below will set the stage
for a deeper retracement towards the $1,750
support zone.”
• “Bulls might now wait for a sustained
strength back above the $1,800 round-figure
mark before placing fresh bets.

14. XAU/USD Seems Vulnerable - II
• XAU/USD might then climb back to the
$1,821-22 resistance zone, above which a
fresh bout of a short-covering move should
pave the way for a move back towards
challenging the $1,832-34 hurdle.
• Some follow-through buying will negate any
near-term negative bias.”

15. Time For XAU/USD To Shine
• At current prices, gold is attractive to long-
term buyers looking to hedge their portfolio
against risks from dollar weakness, negative
interest rates, high inflation and exogenous
risk events.
• Economists at DBS Bank see the following four
scenarios as probable, and the overall pattern
is for gold price to rise in most scenarios.

16. Gold To Perform In Most Macro
Scenarios
• “One scenario would be when the market
renews its focus on US inflation risks, amid an
improving labour market and supply-side
disruption.
• This could set the stage for a ‘risk-off’ event.
• This scenario played out in 2003 when gold
reacted strongly to inflation fears on the back
of strong oil price.”

17. Gold To Perform In Most Macro
Scenarios - I
• “Another scenario could be escalating virus
cases as vaccine efficacy fades.
• This could lead to a downgrade in growth for
2022 and a delay in the quantitative easing
(QE) taper timeline, which will then be a
positive for gold.
• The US stock climb would probably come to a
halt, and gold will serve its role as a hedge
for volatility.”

18. Gold To Perform In Most Macro
Scenarios - II
• “The inverse correlation with the USD Index
(DXY) has intensified in 3Q21.
• Nevertheless, with negative correlation at a
high, a reversal in the dollar’s strength could
see a strong reversal rally in gold.
• Our DEER FX model indicates that the dollar is
overvalued on a long-term basis.
• However, the dollar could stay firm into 1Q22,
depending on the US’s QE taper timeline.”

19. Gold To Perform In Most Macro
Scenarios - III
• “In a goldilocks scenario with moderate
growth and mild inflation, there will be no
rush for the Fed to hike interest rates, and
bond yields will likely stay at low levels.
• We believe gold will still be supported in this
environment as central banks around the
world continue to accumulate gold as a risk
diversifier.”

20. Gold: $1802 Is A Tough Nut To Crack
On Road To Recovery

21. Thanks for listening
Gold: $1802 Is A Tough Nut To Crack
On Road To Recovery