GOLD Analysis – December 24, 2021

Gold’s Daily Price Analysis

Gold prices ended the day at $1810.10, with a high of $1811.95 and a low of $1799.50. Gold climbed for the second day in a row on Thursday, boosted by the possibility of US inflation after the latest statistics revealed that the world's largest economy was experiencing its worst pricing pressures in four decades. The data from the United States revealed that the so-called PCE had its highest annual growth in 39 years, which eventually strengthened the precious metal due to its traditional position as an inflation hedge.

Meanwhile, the US Food and Drug Administration gave emergency use approval for Molnupiravir, a COVID-19 tablet created by Merk & Co., on Thursday, boosting the current risk-on market trend and limiting precious metals advances. Furthermore, a UK study found that Omicron infections were less likely to result in hospitalisation, but that the variant might still cause a large number of serious cases due to its infectiousness. A study from Asia Pacific, on the other hand, found that two doses of the Sinovac vaccine, plus a booster shot, did not create enough neutralising antibodies to protect against Omicron. This news also contributed to some of gold's advances.

The Core PCE Price Index increased to 0.5 percent at 18:30 GMT, exceeding the expected 0.4 percent, bolstering the US dollar on the data front. The core durable goods orders also increased by 0.8 percent, versus the expected 0.6 percent, supporting the US dollar. Durable Goods Orders rose to 2.5 percent from 1.9 percent expected, bolstering the US dollar. Personal income remained unchanged, with a 0.4 percent increase projected. Personal spending was stable at 0.6 percent.

Last week's unemployment claims jumped to 205K, exceeding the 200K forecast, bolstering the US dollar. At 20:00 GMT, new house sales had fallen to 744K from 770K expected, weighing on the US dollar. The Revised University of Michigan Consumer Sentiment remained unchanged at 70.6. Revised UoM Inflation Expectations stayed unchanged at 4.8 percent. The majority of the data came from the United States, which favoured the greenback and restrained the rise in gold prices on Thursday.

The growing number of countries implementing measures to reduce the Omicron variant spread also contributed to gold's gain on Thursday. On Thursday, China's Xi'an city, which has a population of almost 13 million people, was also closed down. It was the most severe lockdown since the epidemic began in 2020, with all inhabitants instructed to stay indoors and only one member from each family allowed to out every other day for needs.

Despite the Omicron variety sweeping the country, President Joe Biden has ruled out the notion of returning to the March 2020 countrywide pandemic lockdown. According to Biden, the country has enhanced immunisation and medical competence, and the United States will not need to revert to the national pandemic lockdown that occurred in March of last year. This news pushed the US dollar slightly higher on Thursday, limiting gold price gains.

GOLD Intraday Technical Level

Support Resistance

1802.41 1814.86

1794.73 1819.63

1789.96 1827.31

Pivot Point: 1807.18

GOLD - Technical Outlook 

On Friday, trading in gold is disabled amid Christmas holidays. However, the precious metal gold is gained support at the 1,808 level, surged from 1,798 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. 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 signaling a uptrend in gold. All the best!