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Gold Set to Target $1,785, after Getting Rejected at $1,810 – FX Leaders

Happy Friday, traders. Gold closed at $1,801.15, after reaching a high of $1,812.65, and a low of $1,793.55. The precious metal extended its gains, but remained under consolidation for Thursday’s trading session. The US Dollar Index, which measures the greenback’s  value against a basket of six major currencies, dropped all the way to 93.28, which is its lowest level since September 27.

The US Treasury Yield, on a 10-year note, reversed its course on Thursday and broke its bearish streak of the previous four days, to reach the 1.58% level. The softer US dollar and data showing that the US economy has grown at the slowest rate in more than a year, boosted the yellow metal prices.


Advance GDP for the quarter dropped to 2.0%

On the data front, at 17:30 GMT, the Advance GDP for the quarter dropped to 2.0% against the projected 2.6%. This weighed on the US dollar, pushing gold higher. The Advanced GDP Price Index for the quarter surged to 5.7%, against the expected 5.3%, lending support to the US dollar and ultimately capping any further gains in the precious metal prices.

The Jobless Claims from last week fell to 218K, against the forecast of 290K, which supported the US dollar, limiting the rise in gold prices. At 19:00 GMT, the Pending Home Sales dropped to -2.3%, against the expected 0.4%, which weighed on the US dollar, pushing gold prices higher.

The gross domestic product (GDP) of the US increased at a 2.0% annualized rate last quarter, amid a resurgence in COVID-19 cases, that further stretched global supply chains and led to a shortage of goods, like automobiles, slamming the brakes on consumer spending. The US dollar fell by 0.6% against its rival currencies on Thursday, after the release of this report, pushing gold higher, as the dollar and gold move in opposite directions.

US Federal Reserve Meeting

The market participants have shifted their focus to the US Federal Reserve meeting, which is scheduled for November 2-3, 2021. Their policy announcement is expected to impact gold prices significantly, as Chairman Jerome Powell has said that the time to taper bond purchases is drawing near.

Gold Price Forecast
Gold Price Forecast – 4-hour Timeframe – Upward Channel

Gold Daily Technical Levels

Support             Resistance
1,792.25            1,811.35
1,783.35            1,821.55
1,773.15             1,830.45
Pivot Point:     1,802.45

Gold Price Forecast – Upward Trendline Supports at $1,788

In the 4-hour timeframe on Friday, the precious metal, gold, was rejected at $1,810, and it has started closing candles below this level. That suggests a bearish bias among investors. Gold is now likely to gain support at the 1,786 level, which is being extended by an upward channel. The closing of candles below the 1,790 level supports a selling bias.

On the other hand, immediate support for gold remains at 1,782, and violation of this level would expose it to the 1,777 level. On the higher side, the resistance remains at levels of 1,799 and 1,814. The RSI and Stochastic support a selling trend today. We need to keep an eye on the $1,786 level – a break below this might offer us a selling trade and vice versa. Good luck!

Read More : Gold Set to Target $1,785, after Getting Rejected at $1,810 – FX Leaders

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