GOLD Analysis – December 30, 2021

Gold’s Daily Price Analysis

Gold prices ended the day at $1805.40, having reached a top of $1807.95 and a low of $1789.20. Gold continued its losses and fell for the third session in a row, reaching a five-day low, owing mostly to rising US Treasury yields. Treasury rates on the benchmark 10-year note in the United States increased substantially on Wednesday, reaching 1.56 percent, their highest level since November 19th. Rising government yields boosted the opportunity cost of non-interest-bearing gold, driving down precious metals. Nevertheless, the US Dollar Index, which gauges the dollar's value against a basket of six main currencies, fell to 95.93 on Wednesday, limiting gold's losses.

The US dollar fell on Wednesday due to the release of adverse macroeconomic data and the market's current risk appetite. Consequently, the dollar has recently strengthened in the market due to its safe-haven position, but market players have switched to riskier currencies as optimism has returned to the market.

According to Rochelle Walensky, Director of the Centers for Disease Control and Prevention, COVID-19 mortality and hospitalizations were relatively modest despite the number of cases reaching record highs due to the spread of the Omicron variety. She stated that the quick spread of the Omicron variation had significantly increased the number of cases, yet hospitalizations and deaths remained comparatively low, implying that the Omicron form was less severe than the Delta variant. Following these remarks, market players began to shift toward riskier assets, putting pressure on safe-haven currencies such as the dollar. Furthermore, gold, a safe-haven asset, fell as the market's risk appetite increased.

On the statistics front, the Goods Trade Balance fell to -97.8 billion at 18:30 GMT, falling short of the anticipated -89.0 billion and weighing on the US dollar. The preliminary wholesale inventories declined to 1.2 percent, vs. the predicted 1.5 percent, bolstering the US dollar. Pending Home Sales fell to -2.2 percent at 20:00 GMT, compared to an anticipated 0.6 percent, weighing on the US dollar. The majority of the data issued from the United States was negative for the dollar, and as a result, the greenback remained under pressure.

GOLD Intraday Technical Level

Support Resistance

1793.75 1812.50

1782.10 1819.60

1775.00 1831.25

Pivot Point: 1800.85

GOLD - Technical Outlook 

On Thursday, gold is trading bearish at 1,800, having violated a narrow range of 1,808 – 1,804 levels. The intra-day pivot point extends the support at 1,800, and the bearish bias remains solid below this. In the 4-hour timeframe, closing bearish engulfing candles indicates strong selling bias among investors. Therefore, on Thursday, gold prices are exposed to 1,795 or 1,793 support zone.