- Gold eases from the one-week top, near to the key technical hurdle.
- Market sentiment improves on receding Omicron fears, stimulus hopes.
- S&P 500 refreshed all-time high, yields drowned DXY amid year-end holiday season
Update: Gold price is in the red for the first time in four trading days, as the improvement in the market sentiment, which drove Wall Street to fresh record highs. Easing worries from the highly infectious Omicron coronavirus variant combined with strong US Retail Sales data lifted the risk sentiment while pushing the traditional safe-haven gold out of favor. The downside in gold price, however, appears limited by the subdued price action in the yields and the US dollar. Holiday-thinned market conditions put gold price at risk of wild swings.
Gold (XAU/USD) remains firmer around $1,812 during Tuesday’s Asian session, after refreshing the weekly peak the previous day. The yellow metal cheers the market’s risk-on mood, as well as downbeat US dollar prices, to keep buyers hopeful during the final days of 2021.
Easing fears of the South African covid variant and stimulus hopes could be cited as the major catalysts for the latest market optimism even as light calendar and holiday mood restricted the metal’s performance.
Traders believed in studies from South Africa and the UK showing fewer odds of hospitalization due to the Omicron covid variant to take a sigh of relief from the Omicron fears. Adding to the market optimism were the policymakers’ actions suggesting the receding challenges due to the virus outbreak. Recent, the US Centers for Disease Control and Prevention (CDC) reduced the isolation and quarantine period for the general population from the previous 10 to five.
Comments from US Vice President Kamala Harris who signaled to use her tie-breaking vote to pass President Joe Biden’s Build Back Better (BBB) stimulus plan also favored market sentiment. On the same line were headlines from the People’s Bank of China (PBOC) and the Chinese Finance Ministry that favored further easy money to help sustain the economic growth of Australia’s largest customer.
Additionally, ongoing talks over Iran’s denuclearization and a global push for peace between Russia and Ukraine also seem to have offered relief to the markets.
It should be noted that a downbeat print of the US Dallas Fed Manufacturing Index for December, 8.1 versus 13.2 expected and 11.8 prior, also weighed on the US dollar and favored the gold prices.
That said, Wall Street portrayed a positive start to the week with S&P 500 renewing all-time high while the US 10-year Treasury yields eased from the two-week high, down 1.7 basis points (bps) to 1.47%.
Given the holiday mood and an absence of major catalysts, Omicron headlines keep the driver’s seat. Also important are the US housing and Richmond Fed Manufacturing data.
Gold prices seesaw around 200-SMA, also below the double tops marked during the last one month. The year-end inaction could well be perceived from the sluggish MACD signals and lackluster RSI near the overbought territory.
It should be noted, however, that the gold buyers keep the reins, as portrayed by a two-week-old ascending trend line. However, a clear upside break of $1,816 will become necessary for the bulls to aim for highs marked during July and September, around $1,834.
Alternatively, gold sellers need a clear downside break of a two-week-old ascending trend line, near $1,802, for re-entry. Adding to the support is the $1,800 threshold.
Following the quote’s weakness past $1,800, the 100-SMA level of $1,787 will act as a buffer before directing the gold bears to $1,765 and the monthly low near $1,753.
Gold: Four-hour chart
Trend: Further upside expected
Additional important levels
|Today last price||1812.02|
|Today Daily Change||3.12|
|Today Daily Change %||0.17%|
|Today daily open||1808.9|
|Previous Daily High||1809.2|
|Previous Daily Low||1807.52|
|Previous Weekly High||1810.76|
|Previous Weekly Low||1784.91|
|Previous Monthly High||1877.23|
|Previous Monthly Low||1758.92|
|Daily Fibonacci 38.2%||1808.16|
|Daily Fibonacci 61.8%||1808.56|
|Daily Pivot Point S1||1807.88|
|Daily Pivot Point S2||1806.86|
|Daily Pivot Point S3||1806.2|
|Daily Pivot Point R1||1809.56|
|Daily Pivot Point R2||1810.22|
|Daily Pivot Point R3||1811.24|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.