Gold Prices Look to Real Rates as November FOMC Nears, PMI Data Due
GOLD TECHNICAL ANALYSIS – BEARISH BACKDROP REMAINS DESPITE STICKY RANGE
Gold prices remain locked in familiar territory below the $1800/oz figure, though the bearish bias established from August 2020 remains intact. A break below support at 1750.78 may expose 1717.89 on route to the 2021 floor under $1700/oz. Resistance begins at 1808.16, followed by the range top at 1834.14. A daily close above that seems needed to make the case for upside follow-through.
· Spot gold is poised to break a resistance at $1,788 per ounce and rise into a range of $1,795-$1,798
· Gold Price Forecast: XAU/USD eyes a firm break above $1795 amid growing inflation fears
The global central bankers’ underscoring growing inflation risks, gold bulls found some consolation. Gold is usually considered as a hedge against inflation, especially in light of the recent upsurge in energy prices worldwide.
· Gold Price Chart - Technical outlook
Technically, nothing seems to have changed for gold price on the four-hour setup, as it continues to waver a rising channel formation.
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.
The Relative Strength Index (RSI) is trading flat but holds well above the midline, suggesting that the bullish bias remains intact. Meanwhile, the 21-Simple Moving Average (SMA) and 50-SMA bullish crossover continue to play out in favor of gold bulls.
However, rejection once again at the channel resistance could see gold price falling back towards the upward-sloping 21-SMA at $1779, below which the 50-DMA at $1777 could come into play. At that level, the rising trendline support emerges.
A four-hourly closing below the latter will confirm a rising channel breakdown, exposing the immediate support at the bearish 200-SMA at $1769. Further south, the upward-pointing 100-SMA at $1767 will get tested.
· EXCLUSIVE UK public's inflation expectations rocket to record high: GfK
· UK retail sales fall unexpectedly in September
British retail sales dropped by 0.2% September, official figures showed on Friday, adding to signs of weakness in the recovery from COVID-19 and bucking economists' expectations in a Reuters poll for a monthly rise of 0.5%.
· China's land sales slump for second month as developers stay away
· Japan Sept output likely fell as supply disruptions hit automakers
Industrial output likely fell 3.2% in September month-on-month after dropping 3.6% in August, according to a Reuters poll of 14 economists.
Separate data is also likely to show retail sales shrank 2.3% in September from a year earlier following a 3.2% fall in August, the poll showed.
The government will release the retail sales data on Oct. 28 at 8:50 a.m. (2350GMT, Oct. 27) and industry output figures on Oct. 29 at 8:50 a.m. (2350GMT, Oct. 28.)
Reference: Daily FX, FXStreet, Brecorder, CNBC, Reuters
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