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Gold Price Forecast - 4 Hour Timeframe

Gold Soars to $1,794 ahead of the US Retail Sales – Friday’s Trade Plan

Posted Friday, October 15, 2021 by
Arslan Butt • 2 min read

Happy Friday, traders. The precious metal gold has soared to $1,794, ahead of the US retail sales figures. Yesterday, gold prices closed at $1796.55, after reaching a high of $1801.75 and a low of $1787.5. Gold extended its gains for the third consecutive session on Thursday, amid a dip in the US dollar and Treasury Yields.

Gold Live Rate

GOLD

Weakness in the dollar underpins the precious metal, gold, at $1,788

The US Dollar Index, which measures the greenback’s value against a basket of six major currencies, fell to 93.76 during early trading hours. However, it retreated, recovering some of its losses, to close the day at 94.04. The United States Treasury Yield, on a benchmark 10-year note, fell all the way down to 1.50% on Thursday, making it the third consecutive day of declines. The weakness of the US dollar and the declining yield put pressure on the US dollar, driving gold higher for the third consecutive session on Thursday.

The US dollar came under pressure, amid the dismal producer price index data released by the US on Thursday. However, after the release of the jobless claims, the greenback found some support, as the country saw a decline in the number of claims submitted for unemployment benefits last week, indicating growth in the employment sector.

A quick review of economic events

  • At 17:30 GMT, the Producer Price Index for September dropped to 0.5%, against the expected 0.6%. This weighed on the US dollar, adding further to the gains in gold 
  • In September, the Core PPI also declined, coming in at 0.2% against the predicted 0.5%. Thus, it also weighed on the US dollar, which lifted gold higher on Thursday 
  • The US unemployment claims from last week fell to 293K against the anticipated 315K, which supported the US dollar and capped further upside momentum in the yellow metal prices 

Risk-off sentiment boosts safe-haven demand for gold

On the other hand, gold was also supported by the broader market sentiment, which turned to the downside, amid the global energy crunch and rising prices worldwide. The safe-haven metal rose higher on Thursday, as the risk-off market sentiment pushed its price higher.

Furthermore, Federal Reserve Governor Michelle Bowman said that she would be very comfortable if the Fed began withdrawing some of the US central bank’s crisis-era support for the economy as soon as next month. This lent some support to the US dollar and capped any further gains in gold prices.

 

Gold Price Forecast - 4 Hour Timeframe
Gold Price Forecast – 4-Hour Timeframe

Gold soars to $1,794 – The technical analysis supports buying 

  • The precious metal, gold, is currently trading at $1,795 per ounce, and the market has entered the overbought zone
  • On the 4-hour timeframe, the RSI for gold was above 80, demonstrating that gold is overbought. However, it has started coming out of that zone now, and this is likely to trigger a bearish retracement in gold
  • On the lower side, immediate support for gold prevails at the 1,788 level. A breakout below the 1,788 level could trigger a sell-off until levels of 1,780 and 1,774
  • On the higher side, the next resistance for gold remains at 1,802 and 1,808
  • On Friday, we can expect a bearish correction in gold, especially until the 1,788 level. Thus, we should consider buying above 1,788, and vice versa. Good luck!
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