GOLD Analysis – December 22, 2021

Gold’s Daily Price Analysis

Gold prices were closed at $1791.05 after setting a high of $1800.85 and a low of $1785.20. On Tuesday, gold extended its losses and fell for the second session in a row, owing to higher US Treasury yields and improved risk sentiment in the market.

Treasury yields in the United States rose on Tuesday as market participants focused on positive economic conditions and discounted inflation fears at a 20-year bond auction. The US Treasury yield on the benchmark 10-year note rose for another day and reached 1.49%, weighing on gold as it increased the opportunity cost of holding non-interest-bearing precious metals.

On the other hand, the US Dollar Index was low on Tuesday as it continued its decline for the second session and reached as low as 96.34. The US dollar might also be getting weaker amid the prevailing risk appetite in the market, which countered the concerns about the rapidly spreading Omicron variant. On Tuesday, countries across Europe started imposing more restrictions on movement to stop the spread of the Omicron variant. Whereas, US President Joe Biden also appealed to all Americans to get vaccinated to fight the Omicron variant, which was spreading across the whole world days before the second Christmas of the pandemic.

The market's risk appetite returned after reports suggested that the US Food and Drug Administration was set to authorize COVID-19 treatment pills from both Pfizer and Merk as early as Wednesday. The news about the approval of Paxlovid (Pfizer) and Molnupiravir (Merk) pills by the FDA raised optimism in the market that it would help fight the Omicron variant, and hence, the risk-on market sentiment emerged, which ultimately had a negative impact on gold prices.

Furthermore, the risk sentiment was also pushed up by the statement from Moderna that a booster shot of its COVID-19 vaccine appeared to be protective against the rapidly spreading Omicron in its laboratory testing. Moderna emphasized that the current version of the shot would continue to be its first line of defense against Omicron. These Moderna comments increased risk appetite and weighed on safe-haven assets such as precious metal gold.

At 18:30 GMT, the current account balance of the US dropped to -215B against a projected -206B and weighed on the US dollar, which limited the decline in gold prices on Tuesday. No more data was released from the US side on the day, which kept the greenback under consolidation.

GOLD Intraday Technical Level

Support Resistance

1783.89 1799.54

1776.72 1808.02

1768.24 1815.19

Pivot Point: 1792.37

GOLD - Technical Outlook

Gold is gaining support at the 1,784 level, dropping from 1,791 pivot point level. On the 4-hour timeframe, gold has closed a Doji candle supporting weakness in the bullish bias. Therefore, the closing of candles under the 1,791 pivot point keeps gold under pressure. On the resistance side, gold’s major hurdle stays at 1,791, and above this, prices will be exposed towards the next resistance level of 1,797 and 1,806. Further on the higher side, the resistance stays at 1,813.

Gold’s immediate support stays at 1,784 levels. At the same time, a break below the 1,784 support might expose the gold price down to 1,775 or 1,766 level. The RSI and Stoch are signaling a downtrend in gold. All the best!