GOLD Analysis – November 29, 2021

Gold’s Daily Price Analysis

Gold was closed at $1797.25 after setting a high of $1797.90 and a low of $1782.80. Gold moved higher on Friday and reversed its course after investors started rushing towards safe havens over concerns about a new coronavirus variant in South Africa. However, gold remained low for the week as markets were betting on the US Federal Reserve to turn more hawkish.

On Friday, the World Health Organization named the new variant of the coronavirus first found in South Africa "Omicron" and categorized it as "of concern." The variant has been reported in several countries, including Belgium, Hong Kong, Botswana, and Israel. Omicron is associated with very high transmissibility and significant immune escape, which is alarming for another spread.

Given these concerns, many European nations, including France, Germany, Italy, and the UK, announced new travel restrictions for travellers from South Africa and neighbouring countries, including a 14-day quarantine period for travellers, whether vaccinated or not. Furthermore, Canada and the United States have also closed their borders to South Africa and surrounding countries due to the new variant. These conditions prevailing in the market added to the risk-off market sentiment and supported safe-haven metals on the last day of the week.

Meanwhile, the US Dollar Index that measures the greenback's value against the basket of six major currencies surged on Friday and reached 96.28. Greenback reversed its course on Friday despite the prevailing risk-off market sentiment. The dollar was gathering its strength over the bets of a rate hike and reduced stimulus. However, the gains in the dollar were limited and failed to turn the momentum of precious metals.

The yellow metal was also gaining some support because the Fed was unlikely to modify its taper timeline as monetary policies were closely intertwined with the public sentiment of government that any change would be negative for their next election prospects.

However, gold remained down for the week, with the lowest weekly level since mid-June and down by 2.9%. Due to the rising expectations, the US Federal Reserve could hasten interest rate hikes, which raised the opportunity cost of holding non-interest-bearing bullion.

GOLD Intraday Technical Level

Support Resistance

1787.40 1802.50

1777.55 1807.75

1772.30 1817.60

Pivot Point: 1792.65

GOLD - Technical Outlook

On Monday, the precious metal gold continues to trade sideways, maintaining a narrow trading range of 1,804 and 1,780 level. Oversold gold has risen over the $1,782 support level, with a 23.6 percent Fibonacci retracement level at $1,802 in sight. A rise in purchasing pressure might help gold break past a key resistance level at 1,803, taking it to $1,815 or $1,830.

On the other hand, a break of the $1,782 level might spark a sell-off until the $1,760 support level is reached. The RSI is above 50, indicating a positive turnaround in gold. As a result, bullish bias dominates above $1,791 with a target of $1,803. All the best!