Gold Price Analysis: XAU/USD Rises To $1795 But Potential Losses Persist

On Monday, the price of gold continued Friday’s sell-off to approach the $1760 mark but recovered some footing to conclude the day at $1765. The gold value dropped again as a result of the prolonged surge in US Treasury yields throughout the curve, as traders continued to welcome the positive news in the American Retail Sales figure, which fueled speculation on the Fed’s cutting as soon as next month. The rise in rates helped the Dollar, which also benefited from China’s dismal third-quarter GDP, which triggered a risk-off market profile.

Furthermore, the Bank of England’s (BOE) hawkish comments increased the damage to non-interest-bearing gold. However, risk appetite rose in the United States in the last session as technology stocks surged on the expectation of better corporate quarterly earnings. The optimistic mood on Wall Street halted the currency’s surge and provided a floor for gold prices. So far in Tuesday’s trade, gold has mounted a good return, extending the earlier gain, as the Greenback falls dramatically across the board.

The risk-on sentiment has spread into Asian markets, pushing the Dollar to resume its decline from multi-year highs. Furthermore, Tuesday’s disappointing US Industrial Production report re-ignited fears about the economy’s rebound, helping the non-yielding price of gold at the cost of Treasury yields. The price of gold is also supported by an uptick in interest in the shiny metal from India as the festive season begins.

Due to increased demand in the country, gold shipments increased to over $24 billion between April and September 2021, according to the Indian Ministry of commerce and industry on Monday. The wider market mood and the price behavior of yields will be attentively monitored throughout the day to place new wagers on the gold price. Despite a sparse economic schedule, investors are looking forward to statements by ECB and Fed leaders.

Gold Price Statistic – Analytical Viewpoint

XAU/USD CHART Source: Tradingview.com

Following a brief slide underneath it, gold price successfully defended the important ascending trendline strength at $1765, as bulls found new offers at the diagonal 21-Daily Moving Average (DMA) around $1760. On Tuesday’s rebound path, gold is projected to encounter initial opposition at the horizontal 50-day moving average of $1778. A prolonged move over the latter might result in a retake of the confluence zone of the 100 and 200-day moving averages at $1795.

The 2-week Relative Strength Index (RSI) is pushing higher above the midline, indicating that the price has resumed its upward momentum. Nevertheless, an upcoming bear cross, with the 100-day moving average ready to cut the 200-day moving average from above, cautions gold bulls. Thus, if the 21-DMA level breaks strongly, the prior week’s demand area of $1750-$1745 becomes available. Further down, sellers may have their sights set on the multi-week low point of $1722.

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