Gold Analysis 11.10.2021

Gold futures contracts fluctuated in a narrow range tilted to the downside during the Asian session, to witness its rebound to the second session from its highest since September 22, with the positive stability of the US dollar index according to the inverse relationship between them amid the scarcity of economic data today, Monday by the American economy, the largest economy in the world. The world is closed this weekend due to the Columbus Day holiday in the United States.

At exactly 05:59 am GMT, gold futures contracts for December delivery fell 0.05% to trade at $1,756.60 an ounce, compared to the opening at $1,757.40 an ounce, with the dollar index rising 0.03% to 94.14 compared to the opening at 94.11. 

The markets are looking forward to tomorrow, Wednesday, for the Federal Reserve to reveal the minutes of the Federal Open Market Committee meeting, which was held September 21-22, during which the interest rate was kept at its lowest ever, between zero and 0.25%, and the bond purchase program of more than 120 $ billion, with the disclosure at the time of the committee members' expectations for growth rates, inflation and unemployment, as well as the future of interest rates for the next three years.

This comes in the wake of labor market data at the end of last week showing a decline in unemployment rates to 4.8%, compared to 5.2% last August, outperforming expectations that indicated a decline to 5.1%, while the reading of the job change index for sectors other than agricultural showed about 194 thousand. A job added compared to 366 thousand jobs added, which was modified from about 235 thousand jobs, worse than expectations that indicated about 490 thousand jobs added.

In the same context, we also followed last Friday the release of the average hourly earnings index, which reflected the acceleration of the growth pace to 0.6% compared to the previous reading for the month in August and expectations at 0.4%, and this comes in conjunction with the growing concern about the ignition of inflationary pressures in the shadows of the crisis Global energy, and as markets prepared for the Federal Reserve to begin reducing its bond purchases above $120 per month.

Technical Analysis

Gold price ended last Friday’s trading with negativity below the 1770.00 level, after the positive attempts it witnessed in the past sessions, which keeps the bearish trend scenario valid and effective for the upcoming period, and the price needs to break the 1757.00 level to enhance the chances of continuing the decline towards 1735.00 as a first negative station.

Therefore, we are waiting for an additional decline on the intraday term, noting that breaching 1770.00 then 1780.00 levels will stop the suggested negative scenario and lead the price to turn to the upside.

The expected trading range for today is between the support 1735.00 and the resistance 1770.00

The forecast general trend for today: Bearish