The price of gold rises above $ 1,800 USD

The price of gold stabilizes at around $ 1809 USD, after dropping the high of the week to $ 1810 USD the day before. In doing so, the yellow metal shows typical market inactivity on Christmas Eve.

  • Gold prices remain sluggish after a bullish routine near the weekly high.
  • Risky mood and a weaker US dollar favored gold buyers despite stronger returns.
  • Omicron, US stimulus, and China are the main catalysts to look at short-term direction.
  • 2022 Gold Outlook: Correlation to US Treasury Yields Boosts Gold

That said, the bulls recently applauded optimism about the lower chances of hospitalization due to the South African variant of covid, dubbed Omicron. The approval of Merck’s Covid-19 pill by the US Food and Drug Administration (FDA), a day after it approved Pfizer’s pill to combat Omicron, was also positive for gold. Earlier this week, the US military also announced the development of a unique cure for covid and all of its variants.

It should be noted, however, that the French cancellation of orders for the Merck pill, citing a significantly smaller effect than promoted, is coupled with a steady surge in Omicron cases to challenge market optimism and gold prices.

On a related note, stronger US data supported US Treasury yields to update their monthly high of close to 1.50%. Among key economic drivers, increases in the Fed’s favorite inflation gauge, the core PCE price index, plus durable goods orders and Michigan’s consumer sentiment index, helped trim bonds lately.

In addition, indecision about US President Joe Biden’s Build Back Better (BBB) ​​plan and China’s aversion to the US passing a bill highlighting the problems of the Uighur minority. they also question the risky mood and put gold buyers to the test.

From afar, the last words of a Fed lawmaker, Christopher Waller, were harsh, signaling rate hikes in early 2022, which in turn calls into question the continued rise of the metal.

Importantly, the reduced market volume during the holidays and the disability in several Western exchanges could challenge momentum traders.

Technical analysis of gold prices.

Gold prices have hovered around the SMA-200 moving average as the slow MACD and the nearly overbought RSI line suggest a pullback, but the lack of market movement keeps the recovery moves intact.

That being said, the $ 1800 round number is the key to further declines for the metal targeting the SMA-100 moving average level near $ 1785.

However, it should be noted that various supports near $ 1770 and the early December low at $ 1762 may test the bears before taking them to the monthly low near $ 1753.

Alternatively, the highs marked in late November and the monthly high, near $ 1814-16, challenge short-term gold buyers before taking them to highs marked in July and September around $ 1834.

Gold price chart (XAU / USD) 4 hours

Par Anil Panchal, FXStreet

He worked with Edelweiss Financial Advisors Ltd from 2007 to 2013 as a research analyst for the commodities sector. Anil subsequently joined Admiral Markets from April 2013 to January 2019, where he worked as a Forex analyst. Job roles at both locations were to follow macroeconomics and perform fundamental and technical analysis of commodities and the Forex market, respectively. At FXStreet, he primarily writes asset / technology news articles on various currency pairs, commodity pairs, and even some equity markets. It also helps provide overviews of macro / event data and bank reports when required.

avatrade 970 forex brokerThe opinions expressed here are solely those of the author and do not necessarily reflect the views of Forex Quebec. Every investment and business move carries risk, you need to do your own research when making a decision.

Disclaimer: The information and opinions in this report are provided for general information only and do not constitute an offer or a solicitation to buy or sell currency or CFD contracts. Although the information contained in this document has been taken from sources considered reliable, the author does not guarantee its accuracy or completeness, and does not assume any responsibility for any direct, indirect or consequential damages that may result from the fact that someone trusts such information.

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