Gold Revisits $1,781 Support – A Good Buy Opportunity - Forex News by FX Leaders
Gold - XAU/USD Chart

Gold Revisits $1,781 Support – A Good Buy Opportunity

Posted Tuesday, November 30, 2021 by
Arslan Butt • 2 min read

[[Gold ]] prices closed at $1,788.45, after placing a high of $1,801.50 and a low of $1,783.35. Gold reversed its course again day on Monday, dropping, due to the strength of the US dollar. The US dollar was seeing inflows, thanks to its safe-haven status, amid the prevailing uncertainty in the market regarding whether this new variant is more dangerous than the Delta variant.

 

XAU/USD
The new South African variant of the coronavirus is spreading faster, already having reached to the Netherlands, Denmark and Australia. Given the rising spread of potentially vaccine-resistant variants, more and more countries have started imposing travel restrictions, in efforts to seal the area off, against the coronavirus.
According to the World Health Organization, the new Omicron variant has mutated heavily, posing a very high risk of surging infections. However, some investors believe that its impact might not be as grave as feared, because a top infectious disease expert in South Africa said recently that the existing COVID-19 vaccines might be effective in preventing severe progression of the disease and the need for hospitalization.

This news gained much traction, and investors started reacting positively, which triggered a sell-off in safe-haven metals. The market reacted by assuming that the variant would not be a major issue, which put additional pressure on precious metals, resulting in a drop in gold on Monday.

The US dollar was strong across the market, as it continued its bullish momentum for the second consecutive session on Monday, reaching levels around 96.44. The US Treasury yield, on a 10-year note, continued its bearish trend, falling for the fifth consecutive session, to 1.49%.

Meanwhile, on the data front, at 20:00 GMT, the pending home sales figures came in, showing a surge to 7.5% in October, against the predicted 0.8%, thereby supporting the US dollar and ultimately assisting the further decline in the gold prices, as the two are negatively correlated.

Furthermore, the US dollar was also gathering strength, following Atlanta Fed President Raphael Bostic’s statement that he remains open to accelerating the pace of bond tapering by the central bank. With the increased fears and concerns about the spread of the Omicron variant, the prevailing expectations of a rate hike eased somewhat in the market. These recent comments by Bostic boosted the US dollar and dragged the gold prices further to the downside on Monday.

Gold – A Technical Outlook – XAU/USD to Face Resistance at $1,803

The oversold precious metal, [[gold ]], has recovered to above the 1,782 support level, and it is heading towards a 23.6% Fibonacci retracement level at $1,802. A surge in buying pressure could help gold overcome a crucial hurdle at 1,803, taking the price to levels around $1,815 and $1,830.

Gold - XAU/USD Chart

Daily Technical Levels

Support               Resistance
1,780.70              1,798.85
1,772.95              1,809.25
1,762.55              1,817.00
Pivot Point:       1,791.10On the flip side, violation of the $1,782 level could trigger a sell-off until the 1,760 support. The RSI is holding above 50, demonstrating a bullish reversal in [[gold ]]. Therefore, we should consider taking a buy trade over the $1,791, level to target $1,803. Good luck!

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