Technical Analysis

GOLD Analysis – December 06, 2021

By LonghornFX Technical Analysis
Dec 6, 20213 min

Gold’s Daily Price Analysis

Gold prices jumped over 1% on Friday, as the Omicron coronavirus variety and a drop in US Treasury yields bolstered the safe-haven metal's attractiveness. Gold was up 0.9 percent at $1,785.29 per ounce (2012 GMT). Gold futures in the United States closed 1.2 percent higher at $1,783.90.

Gold is serving from a flight to safety as investor concerns over a speedier Fed taper and the COVID scenario as both Delta and Omicron offer a risk to the short-term growth forecast," says Edward Moya, senior market analyst at brokerage OANDA. "Gold's end-of-week performance is notable since it coincides with curve flattening and high anticipation for a quicker Fed taper."

Sentiment in broader financial markets remained negative, with the Nasdaq down more than 2% as conflicting US job data and concerns over the Omicron coronavirus subtype weighed. The 10-year bond yield in the United States fell below 1.4 percent for the first time since September, lowering the opportunity cost of keeping non-interest-bearing gold.

On the other hand, gold was on track for its third consecutive weekly loss, down 0.4 percent, as Fed speakers sounded hawkish on stimulus reduction and interest rates. Data released on Friday revealed that employment growth in the United States slowed significantly in November, although the unemployment rate fell to a 21-month low of 4.2 percent, indicating that the labor market was fast strengthening.

When the Fed meets later this month, policymakers are expected to speed the winding down of their bond-buying program in response to an improving job market and seek to open the door to quicker rate hikes than previously anticipated.

Rising US interest rates raise the opportunity cost of storing non-yielding bullion; hence gold is very susceptible to rising US interest rates. Spot silver rose 0.6 percent to $22.51 per ounce in other news. Platinum dropped 1.1 percent to $927.07, while palladium rose 1.2 percent to $1,802.51.

GOLD Intraday Technical Level

Support Resistance

1771.64 1791.21

1758.71 1798.57

1751.76 1811.14

Pivot Point: 1778.98

GOLD - Technical Outlook

On Monday, the precious metal gold was trading with a bullish bias at the 1,782 level, having bounced off the major support level of the 1,766 level. On the bullish side, gold has violated the 1,778 pivot point level and now it’s heading towards the 1,791 level. Increased buying pressure supports the uptrend above the 1,778 level and exposes the metal price towards the 1,786 and 1,792 marks.

On the bearish side, immediate support prevails at the 1,778 level and a break below this level exposes the metal price towards 1,771 and 1,766 levels. The RSI and MACD are holding above 50, in the buying zone, so the bullish bias dominates over the 1,778 level. All the best!


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