|

Gold recovers early lost ground to fresh 19-month low, lacks follow-through

   •  Near-term oversold conditions triggered some short-covering bounce. 
   •  A modest USD profit-taking remains supportive of the modest rebound.
   •  Risk recovery/positive US bond yields keep a lid on any further recovery.

Gold quickly reversed an early Asian session keen-jerk fall to $1160 level, fresh 19-month low, and has now turned higher for the day.

Currently trading around the $1177-78 region, testing session tops, the precious metal's sharp rebound from the lowest level since Jan. 2017 could be categorized as a technical bounce amid near-term oversold conditions. 

The ongoing US Dollar profit-taking slide, which tends to underpin demand for dollar-denominated commodities - like gold, seems to be one of the key factors prompting some aggressive short-covering move. 

However, a slight improvement in investors’ appetite for riskier assets, as depicted by a mildly positive trading sentiment around most European equity markets, weighed on the precious metal's safe-haven appeal.

This coupled with resurgent US Treasury bond yields and prospects for a gradual Fed rate hike path further collaborated towards keeping a lid on any strong follow-through for the non-yielding yellow metal.

Hence, it would now be interesting to see if the commodity is able to build on the recovery move or the uptick turns out to be a dead-cat bounce, against the backdrop of this week's slump of over 4%. 

Technical levels to watch

Any subsequent up-move is likely to confront fresh supply near the $1180-81 area, above which the recovery move could further get extended towards $1193 horizontal resistance. On the flip side, $1170 level now seems to protect the immediate downside, which if broken might turn the metal vulnerable to head back towards retesting daily swing lows, around the $1160 region.
 

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD stays weak below 1.1700 on firmer US Dollar

EUR/USD remains under moderate selling pressure and trades below 1.1700 on Monday. The pair stays on the back foot as the US Dollar benefits from the cautious market mood following the US military intervention in Venezuela and the capture of President Nicolas Maduro. Investors await US Manufacturing PMI data.

GBP/USD holds steady above 1.3450 ahead of US data

GBP/USD stages a rebound and trades above 1.3450 following a decline toward 1.3400 earlier in the day. Markets remain wary and prefer safety in the US Dollar due the US-Venezuela geopolitical escalation, limiting the pair's upside. Investors now await the US ISM Manufacturing PMI report for December.

Gold clings to strong daily gains above $4,400

Gold started the week on a bullish note and climbed above $4,400 before going into a consolidation phase in the second half of the day on Monday. Heightened geopolitical tensions help XAU/USD hold its ground after the US launched land strikes on Venezuela, leading to the capture of its President, Nicolás Maduro, and his wife.

ISM Manufacturing PMI set to show US factory activity remained in contraction at year-end

The Institute for Supply Management is scheduled to release the December Manufacturing Purchasing Managers’ Index on Monday. The index is a trusted measure of the health of the United States manufacturing sector, closely followed by market players.

Economic outlook 2026-2027 in advanced countries: Solidity test

After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.

Meme Coins Price Prediction: Dogecoin, Shiba Inu, Pepe rally on Venezuela’s shadow BTC reserve

Meme coins such as Dogecoin, Shiba Inu, and Pepe are leading the cryptocurrency market rally driven by the US cross-border operation to capture Venezuelan President Nicolás Maduro. Dogecoin extends its gain for the fifth consecutive day while SHIB and PEPE take a pause.