Wednesday , October 27 2021

XAU / USD bulls assume the psychological level of $ 1,750


  • Gold consolidates one week’s biggest daily losses near early August levels.
  • Risk appetite improves on Evergrande news, post-Fed rethinking, and vaccine / stimulus optimism.
  • The yields of the US Treasury must be closely monitored with an eye on China, second-level data.
  • Gold price forecast: the heavy risk on the shiny metal

Gold Update: Gold (XAU / USD) is offered on Friday and assumes the psychological level of $ 1,750 in recent deals. The daily bearish momentum correction could lead to a test of the Fibonacci scale and the 38.2% ratio will be key near $ 1,756. Above, the 61.8% gold ratio stands at $ 1,768 and will have a confluence with the 20-day EMA. Resistance there could cause an accumulation for the continuation of the low next week.

However, the fundamentals support a risk-based approach in the markets, with investors buying the Federal Reserve’s optimistic economic outlook. That said, Evergande’s situation is fluid and will pose a risk to the future.

Evergrande has settled a coupon payment for a bond traded in Shenzhen, but is expected to pay $ 83.5 million Thursday for a $ 2 billion offshore bond and also has a $ 47.5 million bond interest payment dollars next week. There is a 30-day window to arrange payments for which the company says it is striving to settle.

“Evergrande President Hui Ka Yan on Wednesday afternoon urged his executives to ensure the delivery of quality properties and the redemption of their wealth management products, which are typically owned by millions of retail investors in the China, “Reuters reported.

End of update

Gold bears (XAU / USD) are taking a breather for around a six-week low, raising bids to $ 1,744 during Friday’s first Asian session.

Yellow metal fell further in a week from the previous day after U.S. Treasury yields at ten years hit the biggest daily jump in seven months, around 1.43% in the press.

After an initially downward reaction from the US Federal Reserve (Fed), US bond yields rose as traders revalued the falconry phenomenon of the US central banker. That said, the Fed left benchmark rates unchanged near 0.25% at the last meeting, but noted rate hikes and more serious declines.

Elsewhere, the fading fears that the difficult Chinese real estate Evergrande is a serious threat to the economy plays a key role. The firm obtained restructuring plans and was willing to pay a scheduled coupon, while also gaining government support to lift sentiment.

It’s worth noting that progressive talks about the $ 3.5 trillion stimulus and vaccine optimism add to the risky mood.

That said, Wall Street portrayed a rosy picture of market sentiment, while the S&P 500 futures are up 0.10% at the latest.

It should be noted that the softer impressions of the U.S. PMI preliminary readings for September could not remind gold buyers, nor did the U.S. dollar index (DXY) fall on Thursday, the biggest in a month. .

Going forward, gold traders need to pay close attention to U.S. Treasury yields to boost them, while U.S. new home sales in August, which were expected to be 0.7 million versus 0.708 previous millions, could offer additional clues.

Technical analysis

Despite bouncing the 23.6% Fibonacci retracement (Fibo.) From the June to August downside, gold prices maintain the previous day’s break of a six-week support line, now resilient around of the $ 1,750.

Traders are also favored by MACD bearish signals and sustained trading below the 10-DMA, as well as a downward trend line from 3 September.

It should be noted, however, that the August 10 low of about $ 1,717 could challenge gold bears that exceed Fibo’s 23.6%. level of $ 1,741 in RSI inches close to overselling conditions.

If the metal falls below $ 1,717, the $ 1,700 threshold and the annual low of about $ 1,687 will return to the charts.

Meanwhile, a rise beyond resistance turned into support near $ 1,750, will be probed by the $ 1,770 10-DMA level and a three-week resistance line close to $ 1,780.

After the $ 1,780 uptrend, the 50% and 61.8% Fibonacci retracement levels, around $ 1,801 and $ 1,829, respectively, could entertain gold buyers before challenging them with doubles. tops of $ 1,834.

Overall, gold prices remain bearish, but $ 1,717 will be a tough thing for sellers.

Gold: daily chart

Trend: A new weakness is expected

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