- Gold holds steady amid quiet markets, sitting at weekly highs.
- US Treasury yields decline offseting the rebound in the greenback.
- Gold yearns for acceptance above December highs amid bullish technical setup.
Gold price remained stuck within an extremely tight range above $1,800 on Christmas Eve, as most traders were out celebrating the festive season in the US and Europe. US Treasury markets were closed on Friday but the upside in gold price remained capped by the previous recovery rally in Treasury yields, with the 10-year having recaptured the 1.50% level. Gold price managed to find support from an across the board profit-taking slide in the US dollar as year-end flows and thin liquidity played out. Markets also remained wary amid surging Omicron cases in the UK and Europe which kept them away from placing any directional bets on gold price heading into the extended Xmas weekend.
During this Monday’s trading so far, nothing seems to have changed for gold price as it maintains its range play at almost one-week highs of $1,812. The renewed downside in Treasury yields offset broad strength in the US dollar, keeping the buoyant tone intact for gold price. 10-year yields have slipped back below the 1.50% level, currently trading at 1.48%. Investors continue weighing in the impact of the Omicron covid variant-induced restrictions on the economic recovery worldwide while being cautious amidst year-end positions’ adjustments and US fiscal spending hopes. Gold price could face the risk of wild moves given that thin liquidity will persist all through this week.
Gold Price Chart - Technical outlook
Gold: Daily chart
Sustaining above all the major Daily Moving Averages (DMA) is boding well for the bright metal at the start of a new week.
The 14-day Relative Strength Index (RSI) is trading flat but well above 50.00, suggesting that the bullish bias remains intact.
Gold bulls need to clear the December highs of $1,814 on a daily closing basis to extend the previous week’s rebound. The next critical target for bulls is pegged at the $1,820 round number.
Alternatively, the mildly bullish 50-DMA at $1,802 could limit any immediate downside move, below which the 200-DMA of $1,797 will be put to test. The 100-DMA at $1,790 is likely to challenge bullish commitments should bearish momentum accelerate.
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