Gold (XAU/USD) prices hang in balance around $1,809, after refreshing the week’s high to $1,810 the previous day. In doing so, the yellow metal shows the typical market inactivity during Christmas Eve.
That said, the bulls recently cheered optimism concerning the fewer odds of hospitalization due to the South African covid variant, dubbed as Omicron. Also positive for gold was the US Food and Drug Administration’s (FDA) approval of Merck's Covid-19 pill, a day after approving Pfizer’s pill to battle the Omicron. Earlier in the week, US Military also conveyed news of developing a single cure for covid and all variants.
It should be noted, however, that the French cancellation of orders for Merck’s pill, citing notably lesser effect than promoted, joins a steady rise in Omicron cases to challenge the market optimism and gold prices.
On the same line were the firmer US data that underpinned the US Treasury yields to refresh monthly high near 1.50%. Among the key economics, upticks in the Fed’s preferred gauge of inflation, namely the Core PCE Price Index, not to forget Durable Goods Orders and Michigan Consumer Sentiment Index, favored the bond bears of late.
Additionally, indecision over US President Joe Biden’s Build Back Better (BBB) plan and China’s dislike for the American passage of a bill that highlights Uyghur minority issues also challenge the risk-on mood and test the gold buyers.
Distantly, the latest words from a Fed policymaker, namely Christopher Waller, were hawkish and signaled rate hikes in early 2022, which in turn challenge the metal’s further upside.
Above all, holiday-thinned market volume and off in multiple Western bourses could challenge momentum traders.
Gold prices seesaw around 200-SMA as sluggish MACD and nearly overbought RSI line suggest pullback but an absence of market moves keep the recovery moves intact.
That said, the $1,800 round figure holds the key for the metal’s fresh declines targeting the 100-SMA level near $1,785.
It should be noted, however, that multiple supports near $1,770 and the early December low of $1,762 may test bears before directing them to the monthly low close to $1,753.
Alternatively, tops marked during late November and the monthly high, close to $1,814-16, challenges short-term gold buyers before directing them to the highs marked in July and September around $1,834.
Trend: Pullback expected
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2022 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.