Our published analysis on 25th Sept was filled with bearish anticipations over the golden commodity and indicated, keeping all the technicals and fundamentals in view - that XAUUSD trading below our sell zone after failing to break above 50% fibo retracement level 1796, was bound to adapt onto dovish sentiments which drew  XAUUSD towards 38.2% fibo 1768, forwarded by a touch down at 1721. In the first half of the week, gold price heavily suffered and reached seven-week lows at 1721, as the previous week’s hawkish shift from the Fed drove the US Treasury yields through the roof while lifting the greenback alongside. Additionally, the several appearances by Fed Chair Jerome Powell and speeches from his colleagues amplified expectations of sooner-than-expected tapering, as the market began pricing in a rate hike in 2022. The hawkish Fed expectations were reflective of the underlying economic optimism. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

It is going to be a quiet start to the Nonfarm Payrolls week, with Monday dropping in the US Factory Order and the Chinese markets will remain closed through Thursday, allowing limited volatility during the Asian trades while gold price remains choppy. Next of relevance for gold traders will be Tuesday’s US ISM Services PMI, with the employment sub-index in focus ahead of Wednesday’s ADP Nonfarm Employment Change.

XAUUSD is trading below a downtrend resistance since mid-September and has dropped below the exponential moving averages 50, 100 and 200 in the daily time frame. Momentum is to the downside and the Relative Strength Index (RSI) is well above 30 – thus allowing for more falls. Support awaits at 1720, which was September's trough, and also cushioned the precious metal back in April. It is followed by August's swing low of 1680. Resistance awaits at the early October high of 1768, followed by 1796 and 1824.

XAUUSD

Oct 02 2021