Gold Breaks Below $1,267 – Quick Update on Short-Term Sell Signal

Despite weak markets on early Thursday, the gold price maintains its previous day's bearish bias around $1,773. The recent dip in the yellow

Skerdian Meta•Thursday, November 17, 2022•2 min read

Gold Breaks Below $1,267 - Quick Update on Short-Term Sell Signal

Despite weak markets on early Thursday, the gold price maintains its previous day’s bearish bias around $1,773. The recent dip in the yellow metal XAU/USD could be attributed to the US dollar’s resurgence and a technical breakdown.

By press time, the US Dollar Index (DXY) has broken a two-day decline and is hovering around 106.40. As a result, the greenback’s index against six major currencies tracks the recent rise in US Treasury yields.

By press time, the benchmark US 10-year Treasury yield had risen 1.2 basis points (bps) to 3.70%, marking the first positive reading in four days.

The DXY’s recent bounce is supported by optimistic US retail sales data for October and mixed comments from US Federal Reserve (Fed) policymakers, which weigh the gold price. Nonetheless, US retail sales increased by 1.3% month in October, compared to the previous 1.0% projected and 0.0%.

XAU/USD

On the other hand, Kansas City Fed President Esther George and Fed Governor Christopher Waller both advocated for modest future rate rises. At the same time, Mary Daly, president of the San Francisco Fed, talked about how hard it is for the US economy to grow. Elsewhere, China’s COVID troubles and a tug-of-war between Republicans and Democrats in the US Midterm Elections appear to have traders on their toes.

While reflecting the sentiment, the S&P 500 Futures print modest gains, while Asia-Pacific shares are divided by press time. The aforementioned risk factors may steer the gold market with a dearth of key data events leading up to the November US Weekly Jobless Claims and Philadelphia Fed Manufacturing Survey.

Gold (XAU/USD) Technical Outlook

The gold price rose to $1,786.50 before reversing bearishly and beginning a bearish correction for the rise that started at $1,616.65, on its way to negative targets that begin at $1,746.45, with a break of this level pushing the price to $1,721.65 as the next correctional target.

As a result, a bearish bias will be recommended for today, with a break of $1,775.00 regarded as an initial positive key to ending the current bearish correction and resuming the main bullish trend.
Today’s trading range is likely between $1,746 support and $1,780 resistance.

Today’s projected trend: Bearish

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.