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Andreas Zanin
Analysis | October 6, 2021

XAU/USD: weekly analysis and forecast

In terms of Gold, it will be impacted by the USD and US Bond Yields which both look set for further strength. A strong USD and rising bond yields points to more Gold weakness with rallies being selling opportunities. Our view of the fundamentals and key technical levels is below.

The USD in our view is likely to remain strong and this is bearish for Gold. Chart below-showing Gold against the USD Dollar Index DXY inverted below:

US Bond yields are on the rise and likely to rise further which is bearish for Gold. GOLD V US 10 Year chart inverted below:

In historical terms, Gold prices remain high

The USD is in a firm uptrend and the DXY broke out to the upside and bond yields have moved sharply higher. Both the USD and bond yields look likely to rise further which is bearish for gold and gold actually is very overvalued in historical terms.

In terms of speculative positioning large funds are heavily long gold and we expect them to exit the market which will add additional downside pressure to gold.

Our view of the key technical levels of support and resistance watch on the charts below.

Technical Analysis

On the weekly chart, we have a down trend and our targets are at 1800.00 then 1500.00 On the daily chart, the trend is down and we expect any rallies to fade back to first level resistance and the 20 Day Moving Average.

 

Research provided by LearnCurrencyTradingOnline.com

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