Market news
25.10.2021, 22:50

Gold Price Forecast: XAU/USD printed a daily close above $1,800, bull’s eye $1,834

  • On Monday, gold advanced $17 during the day, despite risk-on market sentiment.
  • Gold has rallied for five consecutive days, climbing almost $50 until the current market price.
  • XAU/USD: The daily chart is tilted to the upside, but strong resistance at $1,834 lies ahead.
  • US 10-year T-bond yield: A break below 1.55% could push gold prices toward $1,834 and beyond.

Gold (XAU/USD) is barely flat as the New York session winds down and the Asian session begins, is trading at $1,807.68 during the day at the time of writing. On Monday, the non-yielding metal rose almost 1%, from $1,792 to $1,810, amid lower US T-bond yields, with the 10-year yield dropping from 1.678% to 1.633%.

Risk-on market sentiment prevailed during the Monday New York session as portrayed by US stock indices rising between 0.18% and 1.04%, gaining follow-through in the Asian session. Equity futures in Asia climb between 0.12% and 0.31%, except for the FTSE China A 50, down some 0.30%.

Gold reached five days in a row in advance; though the gains have been minimal, the price steadily climbed towards $1,800.  The Federal Reserve entered the blackout period until the November 2-3 meeting, when investors expect the announcement of the bond tapering program. Those expectations kept gold from a steep upward move, as the market cautiously weighs inflationary pressures and the possibility of higher rates in the US.

XAU/USD Price Forecast: Technical outlook

Daily chart

On Monday, gold (XAU/USD) broke a five-month-old downward slope trendline along with the confluence of the 100 and the 200-day moving averages (DMA’s), printing a daily close above $1,800 for the first time since September 8. The abovementioned could well be a strong signal that the yellow-metal might be headed toward higher prices, but the September 3 high at $1,834 would be the first resistance level to surpass on its way towards $1,900. In case of that outcome, there would be nothing on the $1,900 path.

On the flip side, a reversal towards $1,780 could exert additional downward pressure to XAU/USD, leaving $1,746 as the first support area. A clear break of the latter could expose essential support areas—the September 29 low at $1,721, followed by the August 9 low at $1,687.

The Relative Strength Index (RSI) at 62 above the 50-midline supports the upside bias, but the slope is flattish so that gold might be headed for consolidation.

US Government Bond 10-year Treasury yield

The daily chart of the US 10-year Treasury yield depicts a negative divergence with the yield pushing higher, while the Relative Strength Index tops is printing lower highs.

The abovementioned suggest that the US 10-year bond coupon might be headed lower, but at press time, it is testing an area supported for about four months. Also, around the 1.55% area lies an upward trendline broken to the downside in July, but reclaimed its support status on October 15, when the 10-year reached a high of 1.579%. Hence, confirmation of the negative divergence could open the way for another leg-down in yields, thus propelling gold prices higher.

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location