Gold’s Daily Price Analysis
Gold prices ended the day at $1791.15, having reached a high of $181.25 and a low of $1785.95. Following the emergence of risk sentiment in the market, gold reversed course and fell dramatically to its 14-day low on Thursday.
Treasury rates on benchmark 10-year notes in the United States rose for the fourth session, reaching 1.75 percent, their highest level since April 2021. The dollar index, which measures the value of the US currency against a basket of six major currencies, gained and turned green on Thursday, reaching 96.39.
The release of the Federal Reserve's December meeting minutes was the catalyst for the strong currency and higher rates. The minutes indicated that Fed officials discussed raising interest rates to manage the escalating inflationary threats. According to Fed officials, the tight labour market may drive the Fed to raise interest rates sooner than planned and reduce the bank's overall asset holdings in order to contain growing inflation.
The minutes issued by the Federal Reserve on Thursday confirmed market predictions that the Fed will raise interest rates to manage increasing inflation, which is expanding at its fastest rate in 40 years in the United States. This raised the opportunity cost of storing bullion while also pushing treasury yields and the dollar higher. As a result, gold dropped from its main support level of $1800 on Thursday, losing more than 2% in a single day.
On the statistical front, at 17:30 GMT, the Challenger Job Cuts fell to -75.3 percent from -77.0 percent previously. At 18:30 GMT, unemployment claims from the previous week had risen to 207,000, exceeding the anticipated 199,000, weighing on the dollar. The trade balance recorded a deficit of -80.2 billion, which was expected. At 20:00 GMT, the ISM Services PMI fell to 62.0 from 67.0 expected, weighing on the US dollar. The dollar was strengthened by a 1.6 percent gain in industrial orders, versus the projected 1.5 percent increase. On Thursday, the majority of US data was unfavourable, which restrained gold price losses for the day.
Gold losses were also limited by the World Health Organization's recent warning, which stated that the number of coronavirus cases worldwide was fast increasing. Tedros Adhanom Ghebreyesus, the chairman of WHO, stated that the Omicron variety causes less severe disease than the globally dominant Delta strain, but it should not be classified as mild. Authorities around the world were increasing restrictions as the Omicron variety continued to increase coronavirus cases worldwide.
GOLD Intraday Technical Level
Support Resistance
1780.09 1806.29
1770.82 1821.42
1755.69 1831.59
Pivot Point: 1796.12
GOLD - Technical Outlook
Gold is trading with a bearish bias at the 1,790 level, having disrupted the support level of 1,796. An intraday pivot point level extended this support level, and now it's working as a resistance. Below this, the precious metal gold may find immediate support at 1,786, and violation of this exposes the metal towards 1,780 or 1,771 support levels. On the bullish side, the resistance stays at 1,796, and a crossover above this level exposes the metal price towards 1,806 or 1,821 level. The RSI and Stoch RSI are holding a buying zone. However, the bearish bias dominates below 1,796 and vice versa. All the best!
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