Gold’s Daily Price Analysis
The yellow metal price halted its previous day's bullish streak and fell from the one-week high, approaching the critical technical hurdle of $1,810 per ounce. The gold price has fallen for the first time in four trading days, owing to improved market confidence that has pushed Wall Street to new highs. Concerns about the highly infectious Omicron coronavirus type are receding. In the meantime, the solid US retail sales figures further boosted risk sentiment, driving gold out of favor.
Additionally, comments from US Vice President Kamala Harris, who indicated that she might use her tie-breaking vote to help President Joe Biden pass his Build Back Better (BBB) stimulus proposal, boosted market sentiment. Furthermore, ongoing negotiations over Iran's nuclear program and a worldwide drive for peace between Russia and Ukraine appear to have provided some further support to the markets, which was seen as one of the key factors that pushed the safe-haven gold down. Furthermore, the metal's performance was also hampered by the light calendar. On the flip side, the downbeat US dollar, on the other hand, was considered one of the critical factors that helped the XAU/USD pair limit its deeper losses. Currently, the safe-haven metal is trading at the 1,812.14 level and consolidating in the range between 1,808.60 and 1,812.74.
Despite the lack of essential data/events and the holiday mood, the market's trading mood managed to prolong its overnight bullish gain, as shown as the S&P 500 surges as Wall Street opens, up 0.75 percent, to 4,766.02 as of writing. Despite concerns that the Omicron variant might result in the cancellation of 3,000 or more flights over the Christmas weekend due to quarantine measures and a staffing shortage, the market mood has improved. The price of gold has fallen for the first time in four trading days, owing to an improvement in the market mood that has driven Wall Street to new highs.
Technically, concerns about the highly pathogenic Omicron coronavirus type eased, while solid US retail sales data also boosted risk sentiment, driving gold out of favor. Thus, the easing fears of the South African COVID type and stimulus hopes might be regarded as important reasons for the new market optimism. Traders relied on studies from South Africa and the United Kingdom that showed the Omicron COVID form was associated with a lower risk of hospitalization, allowing them to breathe a sigh of relief.
Looking forward, the Omicron headlines will remain in the driver's seat due to the festive mood and the lack of major catalysts. Housing statistics from the United States and manufacturing data from the Richmond Fed are also important to watch.
GOLD Intraday Technical Level
Pivot Point: 1809.37
GOLD - Technical Outlook
On Tuesday, Gold is trading bullish at the 1,813 level, having violated the pivot point resistance level of 1,809. On the 4-hour timeframe, the precious metal has formed a bullish engulfing candle that typically drives an uptrend in the market. Gold’s immediate resistance stays at 1,815 level on the bullish side, and a break above this level exposes the metal towards 1,819 level. Further on the higher side, the next resistance remains at 1,826 level. While the support holds around 1,809 and 1,805 levels, a break below 1,805 levels exposes the metal towards 1,798 and 1,794 levels. All the best!
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