Gold Price Analysis — November 18

Gold (XAU/USD) failed to make use of its intraday bounce to the $1885 area and is now struggling to remain above the $1870 level in the European session.

The prevailing market worries about the economic fallout due to the implementation of renewed COVID-19 restrictions in several states across the US has left the US dollar in a bearish stance since last week Thursday. This is one of the factors underpinning little demand for the dollar-denominated commodity.

However, the latest COVID-19 vaccine-induced market optimism continues to offset the little demand for the yellow metal. This factor, coupled with a decent uptick in the US equity futures, exerted additional pressure on gold and capped any significant gains for the commodity.

This back and forth in fundamental factors have kept the XAU/USD in a consolidation range for some days now, prompting extra caution in placing aggressive bets in either direction. That said, traders will be looking out for a substantial directional move in the near-term.

Moving on, market participants will be monitoring the US economic docket release today—which features the Building Permits and Housing Starts—for clues. Additionally, traders will be monitoring developments surrounding the Coronavirus pandemic.

Gold (XAU) Value Forecast — November 18

XAU/USD Major Bias: Sideways

Supply Levels: $1876, $1891, and $1900

Demand Levels: $1865, $1857, and $1849

Despite being in a consolidation between $1900 and $1857, gold is working its way up through our ascending channel exceptionally well. On our hourly chart, we can observe that the price reacts well with the top and bottom (support and resistance) of our channel for several days now.

That said, we should expect a retest of the $1900 in the coming hours and days, considering that the price has been rejected once again by the bottom of the channel.

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