• Gold picks up bids to refresh intraday high, holds onto weekly trading range.
  • Risk appetite improves as market players reassess covid variant fears.
  • Policymakers, experts reject concerns over the need for major lockdowns, readiness to have vaccines sooner.
  • US Consumer Confidence, Fed’s Powell eyed ahead of Friday’s NFP.

Update: Gold climbed to a fresh daily high, around the $1,795-96 region heading into the European session, though lacked any follow-through and remained well within a one-week-old trading range. Investors remain worried about the potential economic fallout from the spread of a new vaccine-resistant variant of the coronavirus – Omicron. This was evident from a fresh wave of a risk-aversion trade in the equity markets, which continued boosting demand for traditional safe-haven assets. The anti-risk flow turned out to be a key factor that assisted the XAU/USD to attract fresh buying near the $1,780 horizontal support.

The global risk sentiment was further hit by comments from Moderna’s Chief Executive Stéphane Bancel, saying that existing vaccines will be much less effective at tackling Omicron than earlier strains of Covid-19. The latest developments surrounding the coronavirus saga forced investors to scale back their expectations for an early policy tightening by the Fed. Apart from this, risk-off impulse in the markets led to a further decline in the US Treasury bond yields and weighed heavily on the US dollar. This, in turn, was seen as another factor that benefitted the dollar-denominated gold, though the uptick lacked bullish conviction.

Hence, it will be prudent to wait for a strong follow-through buying before confirming that the recent pullback from the $1,877 area, or a multi-month high has run its course and placing fresh bullish bets. Market participants now look forward to the US economic docket, highlighting the release of the Conference Board's Consumer Confidence Index. The focus, however, will remain on Fed Chair Jerome Powell's testimony before the Senate Banking Committee. This will influence market expectations about the Fed's next policy move and provide a fresh impetus to the non-yielding gold.

Previous update: Gold (XAU/USD) refreshes intraday high to $1,788 during early Tuesday, stays within the short-term trading range above $1,780.

The pullback in the US Treasury yields and firmer equities favor gold buyers to bounce off an immediate key support line. However, looming concerns over the South African variant of the coronavirus, dubbed as Omicron, joins anxiety ahead of the week’s key events to restrict the commodity’s moves.

While portraying the mood, the US 10-year Treasury yield drop 1.8 basis points (bps) to 1.51% while the S&P 500 Futures rise 0.30% by the press time. It’s worth noting that shares in Asia-Pacific markets print gains at the latest.

China’s first in three-month above 50 NBS Manufacturing PMI reading for November offers the immediate positive to the market’s mood. Before that, US President Joe Biden’s rejection of lockdown’s need and Fed Chair Jerome Powell’s acceptance of the covid challenges for inflation and jobs report while also backing reflation fears favored market sentiment. Further, US Treasury Secretary Janet Yellen tried placating market pessimism while pushing Congress to overcome the US debt limit deadlock, as well as highlighting the strength of the US economy.

Furthermore, global medicine supplies’ optimism to have the vaccines for the strain and policymakers’ ability to take quick measures to tame the Omicron breakout favor the bulls. Additionally keeping the market players hopeful is the current conditions of the global economies versus the initial days of the pandemic.

Meanwhile, the updates from the US military posture highlights Sino-American tussles and exert downside pressure on the risk appetite. Further, the market’s anxiety ahead of the week’s key data, like Fed Chair Jerome Powell’s testimony and jobs report for November, also probe the risk-on mood.

Other than the testimonies, for which the written scripts are already out, US CB Consumer Confidence for November and covid updates will also be important for markets ahead of Friday’s jobs report.

Overall, gold prices are likely to grind lower amid static hopes of the Fed’s tightening due to the reflation fears.

Read: Omicron covid update: Wait and see, meanwhile, traders buy the dip

Technical analysis

Gold prices grind between a five-week-old horizontal area and an ascending support line from late September. However, steady RSI and receding bullish bias of the MACD signals that the sellers are bracing for entries.

Even so, a clear downside break of the stated support line, around $1,785 by the press time, won’t be enough as multiple levels around $1,780 also challenge gold bears.

Though a clear downside past $1,780 will make the quote vulnerable to test the monthly low near $1,753, with $1,771-70 acting as an intermediate halt.

Meanwhile, sustained run-up beyond $1,815 will get a conviction on crossing November 09 swing high near $1,833.

Following that, gold can quickly target the $1,850 hurdle whereas the $1,870 and the monthly peak of $1,877 could entertain the bulls afterward.

Gold: Four-hour chart

Trend: Further weakness expected

Additional important levels

Today last price 1788.22
Today Daily Change 4.52
Today Daily Change % 0.25%
Today daily open 1783.7
Daily SMA20 1821.91
Daily SMA50 1790.86
Daily SMA100 1793.1
Daily SMA200 1791.92
Previous Daily High 1799.45
Previous Daily Low 1780.18
Previous Weekly High 1849.14
Previous Weekly Low 1778.63
Previous Monthly High 1813.82
Previous Monthly Low 1746.07
Daily Fibonacci 38.2% 1787.54
Daily Fibonacci 61.8% 1792.09
Daily Pivot Point S1 1776.1
Daily Pivot Point S2 1768.51
Daily Pivot Point S3 1756.83
Daily Pivot Point R1 1795.37
Daily Pivot Point R2 1807.05
Daily Pivot Point R3 1814.64



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.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD holds higher ground near 1.0200 ahead of EU Sentix

EUR/USD holds higher ground near 1.0200 ahead of EU Sentix

EUR/USD is trading close to 1.0200 in early Europe, as the US dollar pares strong NFP-inspired gains amid an improving mood. Moody’s cut Italy’s credit rating amid political jitters. US-China tensions over Taiwan loom. EU Sentix awaited. 


GBP/USD recaptures 1.2100 amid USD retreat

GBP/USD recaptures 1.2100 amid USD retreat

GBP/USD is edging higher above 1.2100, underpinned by a weaker US dollar amid a positive shift in risk sentiment. Bumper US NFP data ramped up aggressive Fed tightening expectations. UK political woes and a dovish BOE rate hike could cap the pound's upside. 


Gold steadies near $1,770 as DXY pares NFP-led gains ahead of US inflation

Gold steadies near $1,770 as DXY pares NFP-led gains ahead of US inflation

Gold price pares intraday losses at around $1,775 amid the initial Monday morning in Europe. The yellow metal’s latest rebound could be linked to the technical support, as well as the US dollar’s retreat, amid a sluggish start to the key week.

Gold News

If Tezos price clears this significant hurdle, XTZ holders are in for a treat

If Tezos price clears this significant hurdle, XTZ holders are in for a treat

Tezos price shows a steady grind toward its forecasted target. This development comes after a successful breakout from a bullish pattern. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!