Market news

13 October 2021

Gold Price Forecast: XAU/USD extends rebound beyond $1,770

  • Gold preserves its bullish momentum ahead of the American session.
  • 10-year US Treasury bond yield stays in the negative territory.
  • Dollar struggles to find demand ahead of US inflation data.

The XAU/USD pair struggled to make a decisive move in either direction in the first couple of days of the week but managed to gain traction ahead of US inflation data on Wednesday. The renewed USD weakness and falling US Treasury bond yields seem to be helping the pair push higher. As of writing, gold was up 0.7% on the day at $1,772.

In the absence of significant data releases and fundamental developments, the positive shift witnessed in market sentiment is making it difficult for the greenback to find demand. With the US stocks futures rising between 0.2% and 0.5%, the US Dollar Index is falling 0.25% on the day at 92.28 to punctuate the broad-based dollar weakness. 

Meanwhile, the benchmark 10-year US Treasury bond yield, which fell 3.25% on Tuesday, is staying in the negative territory, providing an additional boost to XAU/USD.

Previewing the Consumer Price Index (CPI) data, "markets are keenly aware that price increases are again playing a part in Fed policy even if the rhetoric is muted," said FXStreet Senior Analyst Joseph Trevisani. "The credit markets tell the story. As inflation rises so should Treasury yields and the dollar. "

US Consumer Price Index September Preview: Inflation averaging, what inflation averaging?

Gold technical outlook

On the four-hour chart, gold is currently trading above the two-week-old trading range and a daily close above $1,770 could open the door for additional gains. However, the Relative Strength Index (RSI) indicator on the same chart is closing in on 70, suggesting that there could be a technical correction before the next leg up.

On the upside, the 200-period SMA acts as the first resistance at $1,775 ahead of $1,787 (September 22 high) and $1,800 (psychological level). 

The initial support is now located at $1,770 (former resistance) before $1,760 (50-period SMA) and $1,755 (100-period SMA).

Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

Open Demo Account
I understand and accept the Privacy Policy and agree that my name and contact details can be used by TeleTrade to contact me about the information I have selected.
23 International Awards
Have a question?

We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.

Follow us

Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.

© 2011-2021 Teletrade-DJ International Consulting Ltd

Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.

The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).

The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.

Please read our full Terms of Use.

To maximise our visitors' browsing experience, TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies.

Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Choose your language/location