GOLD Analysis – December 23, 2021

Gold’s Daily Price Analysis

Gold prices ended the day at $1804.35 per ounce, having reached a high of $1806.20 and a low of $1785.80. Gold reversed course on Wednesday after falling for two consecutive sessions, recouping the majority of its earlier losses despite the US dollar's ongoing weakness.

The US Dollar Index, which measures the value of the dollar against a basket of six major currencies, fell for the third day in a row, falling to 96.02. Simultaneously, the US Treasury yield on the benchmark 10-year note struggled to extend its gains, hovering around 1.45 percent.

The minor decrease in US Treasury yields, combined with the continuous decline in US dollar values, has sparked renewed interest in bullion. Furthermore, the gold price was high due to widespread fears about the Omicron variety. Fears about the new version and its spread heightened the risks of higher inflation and the likelihood of clearer monetary policy from the Federal Reserve, pushing gold higher on Wednesday.

On the data front, at 18.30 GMT, the final GDP for the quarter increased to 2.3 percent, up from the predicted 2.1 percent, bolstering the US dollar. The quarter's final GDP price index stayed unchanged at 6.0 percent. At 20:00 GMT, the US CB Consumer Confidence in December increased to 115.8 from 111.1 expected, supporting the US dollar. Existing house sales fell to 6.46 million, down from 6.55 million projected, and weighted one dollar. The majority of the data from the United States favoured the dollar, which eventually restrained the rise in precious metals prices on Wednesday.

Despite positive economic data, the US dollar remained under pressure on Wednesday, owing to rising risk appetite fuelled by a promising Omicron research and increased optimism about the global economy. A South African investigation found that the odds of hospitalisation and serious disease were lower in Omicron-infected patients than in the prior variation Delta. Furthermore, on Wednesday, the United States approved Pfizer's anti-viral COVID-19 tablet, Paxlovid, for use in persons aged 12 and up, as well as those at high risk. This optimism reignited risk appetite, forcing the US dollar lower due to its safe-haven reputation and driving gold higher due to a negative correlation between the two.

GOLD Intraday Technical Level

Support Resistance

1789.90 1810.40

1777.60 1818.60

1769.40 1830.90

Pivot Point: 1789.10

GOLD - Technical Outlook

On Thursday, the precious metal gold is gaining support at the 1,805 level, surged from 1,789 pivot point level. On the 4-hour timeframe, gold has closed bullish engulfing candles supporting weakness in the bearish bias. Therefore, the closing of candles above the 1,805 pivot point keeps gold underpinned. On the resistance side, gold’s major hurdle stays at 1,810, and above this, prices will be exposed towards the next resistance level of 1,817 and 1,829. Further on the higher side, the resistance stays at 1,836.

Gold’s immediate support stays at 1,805 levels. At the same time, a break below the 1,805 support might expose the gold price down to 1,789 or 1,777 level. The RSI and Stoch are signalling a uptrend in gold. All the best!