Gold traders now look forward to the Markit Preliminary PMI reports from across the Euro area and the US for fresh signals on the economic recovery, which will likely have a significant impact on the risk tone and the dollar valuation. Fed Chair Jerome Powell’s speech will be also closely eyed as a relatively data-light week draws to an end. 

Open interest in gold futures markets reversed two consecutive daily builds and increased by just 128 contracts on Thursday, considering preliminary readings from CME Group. Volume followed suit and shrank by around 42.5K contracts after two daily advances in a row.

The rising trendline resistance at $1795 will continue to offer stiff resistance for gold buyers. A sustained break above the latter will yield an upside breakout from the channel, opening doors towards the previous week’s high of $1801.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES : (TECHNICALS)

Gold buyers battle inside a monthly rising wedge bearish chart pattern amid mixed signals from the MACD histogram and RSI line. Though, the 200-SMA and support line of the stated chart formation offers a tough nut to crack for the sellers around $1,769.

On the contrary, recovery moves need to post a clear run-up through the monthly horizontal resistance surrounding $1,790 to call back the gold buyers.

Following that, the monthly peak of $1,800 and the upper line of the wedge, close to $1,806, will precede the mid-September high of $1,808 to entertain the gold bulls. However, any further upside will need validation from the key $1,834 hurdle that stopped advances in July and September.

It’s worth noting that a downside break of $1,769 will theoretically trigger the south-run targeting the sub-$1,700 area. During the fall, multiple supports around $1,747 and $1,732 can test the gold sellers.

Overall, gold prices fade upside momentum but the bears need clear signals for entry.

XAUUSD Struggling with 50% Fibb

Oct 22 2021