Market news

18 November 2021

Gold Price Forecast: XAU/USD failure at $1,870 opens the door for a retest of $1,850

  • XAU/USD falls as the New York session begins, fails to break above $1,870.
  • US T-bond yields are flat, around 1.60%, as Wall Street opens.
  • XAU/USD Price Forecast: Failure to conquer $1,870 would expose $1,850 as strong support for the non-yielding metal.

Gold (XAU/USD) slides from $1,870s towards the $1,860 area, after a mild-weaker than expected US Initial Jobless Claims reported during the New York session. At press time, XAU/USD is trading at $1,865, down 0.08%.

The US Bureau of Labor Statistics, also known as BLS, reported the Initial Jobless Claims for the week ending on November 13. The figures came at 268K, 8K higher than estimations, but 1K lower than the previous week, revised up to 269K. Surprisingly Continuing Jobless Claims fell by 200K, from 2.209M to 2.080M in the week ending on November 6.

According to sources cited by Bloomberg, Unemployment claims "have been declining on a sustained basis, and are moving to pre-pandemic levels." Further added, "layoffs are falling, reflective of companies holding on to workers amid a labor shortage.''

Once the news crossed the wires, XAU/USD dipped to the daily S1 pivot at $1,858 but instantaneously recovered above the $1,860 region.

Further, as the Wall Street open approaches, US bond yields remain subdued as in the overnight session. The US 10-year benchmark note is flat at 1.60%, while the US Dollar Index took a breather after holding to the 95.80 level, down 0.02%, sitting at  95.76.

XAU/USD Price Forecast: Technical outlook

The daily chart shows that gold found strong resistance around the November 16 high at $1,877. Since then, it has failed to sustain a break above the $1,870 figure, and today Is not an exception.

However, the yellow metal still has an upward bias, as the 100-day moving average (DMA) is crossing over the 200-DMA. Nevertheless, the 50-DMA remains on the bottom of the pile, failing to gain traction, so it can give gold bulls another reason to open fresh bets against the greenback.

On the downside, the XAU/USD next support area would be, according to Dhwani Mehta, Analyst at FX Street, would be the "$1,857, the intersection of the Fibonacci 61.8% one-day and Fibonacci 23.6% one-week." Further, a break below the abovementioned level could send gold tumbling towards the confluence of the pivot point one-month R2 and the November 17 low around $1,849, which would be the last line of defense for gold buyers.

 

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