GOLD Analysis – December 29, 2021

Gold’s Daily Price Analysis

Gold prices ended the day at $1807.00, having reached a high of $1821.65 and a low of $1805.60. Gold surged to its highest level since November 22nd during early trading hours on Tuesday, but it did not last long and fell in late trading hours, prolonging its loss for the second straight session. The key explanation for the session's decline in precious metals prices could be the rise of the US dollar. The greenback increased to 96.23, recouping the previous session's losses. The benchmark 10-year US Treasury note yield climbed on Tuesday, hovering at 1.48 percent, bolstering the US dollar. The strong dollar exacerbated the intense selling pressure around the precious metal.

The October HPI jumped to 1.1 percent, vs. the anticipated 0.9 percent, at 19:00 GMT, supporting the US dollar on the data front. The S&P/CS Composite-20 HPI dipped to 18.4 percent from 18.6 percent predicted, dragging on the US dollar. The Richmond Manufacturing Index rose to 16 at 20:00 GMT, exceeding the projected 11 and supporting the US dollar. Most of the data came from the United States, which drove the dollar higher, adding to the day's selling pressure on precious metals.

Despite the stronger US dollar, gold prices stayed above the critical threshold of $1,800 per ounce, owing to ongoing concerns about rising inflation. Some investors view gold as an inflation hedge, but the metal's vulnerability to rising US interest rates puts it under pressure as the cost of keeping bullion rises. Nevertheless, the rapid spread of the Omicron form boosted the number of cases worldwide, supporting safe-haven gold. Coronavirus transmissions have reached 1.44 million; according to one study, Omicron infects at a rate 70 times quicker than prior strains. However, the disease produced by it may be less severe, particularly for persons who have been vaccinated and have gotten a booster injection. This boosted market confidence and kept gold losses to a minimum for the day.

GOLD Intraday Technical Level

Support Resistance

1801.19 1817.24

1795.37 1827.47

1785.14 1833.29

Pivot Point: 1811.42

GOLD - Technical Outlook 

On Wednesday, gold was trading sideways, maintaining a narrow range of 1,808 – 1,804 levels. The intra-day pivot point extends the resistance level at 1,810, and below this, the bearish bias remains strong. In the 4-hour timeframe, the precious metal forms neutral candles, indicating indecision and a lack of volatility in the market. Therefore, it’s normal to have such market conditions during the holiday session.

Gold’s immediate resistance stays at the 1,807 level on the bullish side, and a break above this level exposes the metal towards the 1,811 level. Further, the next resistance remains at the 1,816 level on the higher side. While the support holds around 1,804 and 1,800 levels, a break below 1,800 levels exposes the metal towards 1,795 and 1,785 levels. All the best!