FXTM information and reviews
FXTM
95%
OctaFX information and reviews
OctaFX
94%
XM information and reviews
XM
93%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
91%
HFM information and reviews
HFM
89%

Gold boosts to multi month high


17 November 2021

Gold moved higher for the second consecutive week and is currently trading at levels previously seen back in June. Even though the price action seems to have stabilized at higher grounds, Gold’s unpredictable and volatile nature is always present, maintaining its attraction for traders. In this report we will detail the most important from our perspective Gold fundamentals, as we aim to provide the best information for traders to make the most accurate decisions. As always Gold’s technical analysis will be included where trends and important levels will be identified.

As we had accurately predicted in our previous report, the most important event for the Gold market in the past week was the US inflation data released on the 10th of November. The data confirmed inflation continues to be on the rise in the US, both on a monthly and yearly basis.

The release enacted a strong bullish reaction for Gold’s price, as the instrument’s positive relationship to higher inflation rates, instantly came into play. In the next 30 minutes after the release, Gold’s price jumped approximately $30, displaying striking movement. However, on a separate note the USD’s correlation to Gold’s price seems to have reversed its normal course. The USD a traditional counter to Gold’s price is currently trading at a 16 month high price basically mirroring Gold’s recent surge. Thus, correlation between the two instruments has turned positive but may require caution when used by traders for signals, as it could be on and off in the short term. Another reading from the previous week that stood out from a Gold’s perspective was the Preliminary University of Michigan Consumer Sentiment for November that dropped substantially from 71.7 to 66.8. Some analysts argue that consumer sentiment has been impacted greatly and may remain soft by the ongoing rise of the inflation rates, especially as these circumstances are expected to follow us well into 2022. Gold moved higher upon release of the news and seems to have maintained this upward tendency in the most recent sessions.

XAU/USD H4 Timeframe

From a different perspective comments by Richmond Fed President Thomas Barkin provided further light on the matters that the FOMC officials are currently focusing upon. When asked on the possibility of a rate hike Barkin replied he supports J. Powell’s comments on the matter stating “we will be patient but we will not hesitate”. Yet Barkin also noted that the Fed may require a few more months to monitor how economic developments will play out before considering such a decision. Moreover, Barkin noted multiple times in his interview that at the moment demand remains extremely strong, as excess savings by consumers remain intact. Yet from our point of view, some ambiguity over the next months was also evident in Barkin’s comments that may support a more bullish approach for Gold at the moment.

In the following days, economic data from the US could assist traders with making trading decisions. On the 18th of November we get the weekly initial jobless claims figure and the Philly Fed Business Index for November. On the 22nd of November we get the Existing Home Sales Figure for October while the very important 23rd of November will provide the Preliminary Markit manufacturing and services PMIs for November.

As a conclusion, yesterday’s virtual meeting between US President Joe Biden and Chinese President Xi Jinping found both leaders seemingly positive towards cooperation and communication. The positivity emerging from the meeting may invite some risk-on tendencies in the short run that can benefit Gold’s price.

At the moment Gold seems to remain in an upward trend line which is highlighted by the ascending colored line on our chart. The (S1) 1865 line that was used as a resistance previously has been clearly breached in the most recent sessions and the price action has now clearly stabilized above it. This moves implies the (S1) support level was considered by traders in the past and may continue to be used in the near term. Yet if the trend continues to be upwards then the next target could be the (R1) 1885 resistance. Our top levels for this analysis and in the scenario of a movement even higher are the (R2) 1905 line and the (R3) 1915 which where both previously seen in June and could be a great challenge for the bulls. In the opposite direction if Gold takes a dive as we noted the (S1) may be approached first while even lower the (S2) 1845 level can be reached. The lowest level for this report remains the (S3) 1825 support. The RSI indicator below our chart remains above 50 implying the buying orders are still in excess while the stabilization at higher grounds seem to be displayed with the vertical line forming nearby the 70 level.

#source

Share: Tweet this or Share on Facebook


Related

USD & Yields higher, Yen, Stocks & Gold sink
USD & Yields higher, Yen, Stocks & Gold sink

A blockbuster NFP on Friday (571k new jobs vs 185k) & strong Services PMI (55.2 vs 50.5) has lifted the Dollar and Yields, sinking Stocks and Gold (the 3 mth Gold rally is over)...

7 Feb 2023

Gold traders appear hesitant
Gold traders appear hesitant

Gold finally broke out of the consolidation after being range bound for nearly 11 days. The correction to the downside was expected as gold traded in the overbought territory...

3 Feb 2023

Do safe haven currencies still exist?
Do safe haven currencies still exist?

At the end of last year, Swiss National Bank (SNB) President Thomas Jordan told news media that both the Swiss franc and the US dollar could be considered safe havens...

3 Feb 2023

USD Index appears bid and approaches 102.00 ahead of Payrolls
USD Index appears bid and approaches 102.00 ahead of Payrolls

The index looks to extend the post-ECB rebound. January Nonfarm Payrolls will take centre stage later. Other key data includes the ISM Non-Manufacturing...

3 Feb 2023

USD Index appears depressed post-Fed, breaches 101.00
USD Index appears depressed post-Fed, breaches 101.00

The index drops to 10-month lows near 100.80. The dollar remains on the defensive post-FOMC event. Initial Claims, Factory Orders next of note in the docket...

2 Feb 2023

Can The GER40 Keep Its Strength?
Can The GER40 Keep Its Strength?

As attention turns to the approaching Fed and ECB announcements, the GER40 index maintains stability near its best level since September last year...

2 Feb 2023


Editors' Picks

FXCM information and reviews
FXCM
87%
ActivTrades information and reviews
ActivTrades
86%
RoboForex information and reviews
RoboForex
85%
MultiBank Group information and reviews
MultiBank Group
84%
Libertex information and reviews
Libertex
83%
Vantage information and reviews
Vantage
83%

© 2006-2023 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.