Update: Gold price is trading flat to lower in Tuesday’s trading so far, with bulls limited by the $1,790 key barrier while the downside remains guarded near $1,780. The risk-off market mood puts a fresh bid under the safe-haven US dollar weighing on gold’s upside. The rapid spread of the Omicron covid variant and its potential risks to the global economy dents risk appetite.

On the other hand, the US Treasury yields remain subdued amid pre-Fed anxiety, keeping gold bulls hopeful. The Fed sentiment and Omicron updates will continue to affect the market sentiment and, in turn, the bright metal. The US PPI data will also offer some trading incentives, as the two-day Fed meeting commences on Tuesday.

Read: Covid-19 Omicron variant sinking high-beta FX

Gold (XAU/USD) rises to $1,788 in a bid to the two-day rebound during early Tuesday. The yellow metal’s recent recovery could be linked to the market’s rush to risk-safety amid multiple negatives concerning Omicron and geopolitical, not to forget cautious mood before critical central bank monetary policy meetings.

The UK’s first Omicron-linked death and return of the mask mandate in California are some of the latest updates concerning the virus strain. The same push the finance ministers and central bank governors of the Group of Seven (G7) nations to pledge more efforts to combat the COVID-19 variant and supply chain issues. Also portraying the Omicron effect is the update from the Asian Development Bank (ADB). “The ADB on Tuesday trimmed its growth forecasts for developing Asia for this year and next to reflect risks and uncertainty brought on by the new Omicron coronavirus variant,” per Reuters.

Elsewhere, the US House of Representatives and the Senate inch closer to an agreement over the Uyghur Bill aimed at China, per Bloomberg, which triggered geopolitical tensions between Washington and Beijing earlier. On the same line was the latest update from Axios saying, “White House National Security Adviser Sullivan to visit Israel next week to discuss Iran.”

It’s worth mentioning that the market chatters surrounding faster tapering of the Fed and hints to the rate hike during Wednesday’s Federal Open Market Committee (FOMC) meeting contrast the latest weakness in the US inflation expectations, providing extra support to gold prices. Recently, the global rating agency Moody’s highlights the delicate decision the US Federal Reserve (Fed) will have to make during Wednesday’s monetary policy meeting.

On the positive side, the US Democratic Party’s push to have a $1.75 trillion worth of aid package by the end of 2021 seems to favor the equities amid mixed concerns.

Against this backdrop, the US 10-year Treasury yields seesaw around 1.42% whereas the S&P 500 Futures print mild gains. Furthermore, shares in Japan, Australia, New Zealand and China trade mixed by the press time.

Moving on, gold traders should keep their eyes on the virus updates and central bank chatters for fresh impulse. That said, the US Producer Price Index (PPI) for November, expected 9.2% YoY versus 8.6% prior, may offer intraday direction.

Technical analysis

Gold extends bounce off a two-month-old horizontal support area, crossing 100-SMA amid firmer RSI and a steady Momentum line.

While the near-term momentum favors buyers, the 200-SMA and a seven-week-long resistance zone, respectively around $1,808 and $1,815 could challenge the bulls.

Should the quote rise past $1,815, odds of witnessing a run-up towards $1,834 level comprising tops marked in July and September holds the key to $1,850.

It’s worth noting that gold’s pullback move teases bearish head-and-shoulder formation, which gets confirmed on a downside break of $1,758. Following that, a theoretical south-run towards refreshing the yearly low of $1,687 lures gold sellers.

However, multiple supports around $1,770, $1,745 and $1,721 can test the metal’s downturn during fall past $1,758.

Gold: Four-hour chart

Trend: Pullback expected

Additional important levels

Overview
Today last price 1787.94
Today Daily Change 0.66
Today Daily Change % 0.04%
Today daily open 1787.28
 
Trends
Daily SMA20 1798.31
Daily SMA50 1796.11
Daily SMA100 1789.96
Daily SMA200 1793.5
 
Levels
Previous Daily High 1791.61
Previous Daily Low 1781.87
Previous Weekly High 1793.17
Previous Weekly Low 1770.19
Previous Monthly High 1877.23
Previous Monthly Low 1758.92
Daily Fibonacci 38.2% 1787.89
Daily Fibonacci 61.8% 1785.59
Daily Pivot Point S1 1782.23
Daily Pivot Point S2 1777.18
Daily Pivot Point S3 1772.49
Daily Pivot Point R1 1791.97
Daily Pivot Point R2 1796.66
Daily Pivot Point R3 1801.71

 

 

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

AUD/USD struggling around 0.6400 and at risk of piercing the year’s low

AUD/USD struggling around 0.6400 and at risk of piercing the year’s low

Disappointing Australian data and a deteriorated market mood weighed on AUD/USD, quickly approaching the 2022 low at 0.6362. RBA’s Financial Stability report coming up next.

AUD/USD News

EUR/USD extends decline sub-0.9800 as risk aversion intensifies

EUR/USD extends decline sub-0.9800 as risk aversion intensifies

The American dollar maintains a strong upward momentum amid renewed inflation and recession concerns. EUR/USD further retreated after failing to regain parity mid-week.

EUR/USD News

Gold struggling to retain its bullish strength

Gold struggling to retain its bullish strength

XAUUSD shed some ground on Thursday, currently hovering around $1,713.00. The dollar has gathered momentum as Wall Street opened in the red, holding into negative territory at the time. Also, government bond yields resumed their advances and hold near fresh weekly highs.

Gold News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: The next move could surprise us all

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: The next move could surprise us all

The crypto market displays mixed signals but hints that the bearish trend is not over yet. Adopting a get-in-get-out mentality may be the more favorable approach for investors looking to expose themselves to the market.

Read more

US September NFP Preview: Analyzing gold's reaction to NFP surprises Premium

US September NFP Preview: Analyzing gold's reaction to NFP surprises

Historically, how impactful has the US jobs report been on gold’s valuation? In this article, we present results from a study in which we analyzed the XAUUSD pair's reaction to the previous 26 NFP prints.

Read more

Forex MAJORS

Cryptocurrencies

Signatures