Gold (Yellow Metal) Reports: Spot gold is holding the lower ground just above $1,850, maintaining its consolidative mode after facing stiff resistance near the $1,868 region. The improving market mood appears to be weighing down on gold price, as the bulls fail to benefit from a broad retreat in the US dollar from yearly highs.
The renewed weakness in the Treasury yields is also doing little to help revive the bullish momentum in gold price. Investors look forward to the US Michigan Preliminary Consumer Sentiment data for fresh dollar valuations, eventually impacting gold price. Meanwhile, persistent inflation concerns and Fed speculation will continue to drive the sentiment around the bright metal.
Gold (Yellow Metal) bulls are taking a breather during the longest weekly run-up in six months, down 0.32% intraday around $1,858 heading into Friday’s European session.
The yellow metal drops for the first time in the last seven days as the US DXY ( Dollar Index ) tracks firmer Treasury yields, mostly steady, to refresh the 16-month high. Also favoring the greenback, and negatively affecting the gold price, is the market’s rush to risk-safety amid mixed concerns over China’s economic transition and Evergrande news, not to forget the Sino-American tussles.
That said, the US Dollar Index (DXY) seesaws around 95.25, the highest level since July 2020 while the US 10-year Treasury yields struggle to remain firmer around 1.56%. That said, the stock futures print mild gains and the Asia-Pacific stocks trade mixed as China’s Communist Party members signed an accord, per Bloomberg, to choose President Xi Jinping as a leader for eternity. The same could join chatters surrounding the Sino-American ties ahead of next week’s virtual summit between US President Joe Biden and his Chinese counterpart Xi to weigh on the sentiment and gold.
On a different page, the gold buyers remain hopeful as the Fed’s tapering concerns remain elevated even as the US bank holiday faded the speculations of late. Additionally, talks over strong demand from Asia-Pacific countries, comprising the largest customers, add to the gold’s bullish catalysts.
It’s worth noting that the gold traders await the US Michigan Consumer Sentiment for November, expected 72.4 versus 71.7 prior, to reconfirm the Fed rate hike concerns.
Spot Gold Technical Analysis & Report
Gold consolidates weekly gains inside a three-day-old bullish pennant formation amid steady RSI. Also challenging the metal sellers, despite the latest pullback, is the weekly support line that puts a carpet under the short-term declines near the $1,848 level.
Even if the gold bears manage to conquer the $1,848 support level, a convergence of the 200-HMA, 50% retracement of the weekly upside and multiple lows marked during November 07-08, around $1,812-14, will be a tough nut to crack..
Alternatively, an upside clearance of the $1,865 hurdle will confirm the bullish chart pattern and trigger the run-up towards refreshing the multi-day top, beyond the latest one of $1,868.61.
In doing so, January’s high near $1,875 will be in focus ahead of the $1,900 threshold.
Gold: Hourly chart
