Title: Gold Price Forecast: XAU/USD holds steady near multi-month peak, US Retail Sales awaited.
11/16/2021 7:55 AM GMT
The prospect of monetary tightening by the Fed in the near future proved to be an important factor in providing a headwind for the low-yielding yellow metal, which is currently hovering around the $1,865-$64 mark. In addition, the recent sharp rise in the US dollar to a 16-month high helped limit the dollar-denominated commodity's upside.
Meanwhile, concerns about a faster-than-expected rise in inflationary pressures continued to weigh on investor sentiment. This was reflected in the cautious sentiment in the equity markets, which provided some support to safe-haven gold. Market participants are now looking ahead to US economic data, with the release of monthly retail sales expected to provide fresh impetus during the early North American session.
Apart from that, US bond yields, USD price momentum, and general risk sentiment in the market could allow traders to take some short-term opportunities in the precious metal.
Despite the refresh of the multi-day top, gold fails to close above the descending trendline from January and the 78.6% Fibonacci retracement (Fibo) of the June-August downtrend on a daily basis.
Besides the important Fibo and the annual resistance line, the overbought RSI around the important $1,867-68 level also poses a challenge for gold buyers.
Another challenge for gold buyers beyond $1,868 is the $1,900 threshold and the June high at $1,917, the break of which would test the annual high of $1,959.
Alternatively, pullback moves could target the 61.8% Fibonacci retracement level at around $1,830.
If gold sellers break above $1,830, the October high at $1,813 comes into focus. It is worth noting that the July and September highs of around $1,834 reinforce the downside filters.
In summary, gold remains bullish, but a pullback cannot be ruled out.