GOLD Analysis – December 10, 2021

Gold’s Daily Price Analysis

Gold prices ended the day at $1776.70, with a high of $1788.40 and a low of $1773.30. After climbing in the previous two sessions, gold reversed course on Thursday. The decline in precious metals prices could be related to the strengthening of the US dollar as speculators took positions ahead of the US inflation data this week.

The US Treasury Yield on the benchmark 10-year note lost its three-day bullish trend on Thursday, falling to 1.47 percent. The US Dollar Index, which measures the value of the US dollar against a basket of six major currencies, regained all of its prior daily losses and rose to 96.34.

Traders were anticipating the release of the US Consumer Price Index report since it will have a direct impact on the Federal Reserve's monetary policy. Analysts predict that higher inflation figures will benefit gold and push its price closer to $1800, but low inflation figures will have a negative impact on gold.

The market's decreasing movement signalled that most traders expected inflation statistics to fall this month. However, one must not overlook the other variables influencing gold prices, such as concerns over the Omicron variant and future geopolitical tensions.

Uncertainties prevailed in the market as a result of the Omicron variation, rising tensions between Russia and the US, Western nations' diplomatic boycott of the Beijing Olympics, and US sanctions against Iran. Because of the precious metal's safe-haven status, these persisting difficulties provided support, limiting the day's slide in gold.

On the data front, at 18:30 GMT, Unemployment Claims from the previous week fell to 184K, versus an anticipated 218K, supporting the US dollar. At 20:00 GMT, the Final Wholesale Inventories jumped to 2.3 percent, versus the expected 2.2 percent, and the US dollar was weighted. Last week's good jobless claims report bolstered the US dollar and contributed to gold's downward trend.

The market's attention has switched to the release of the US CPI report on Friday, which will provide indications about the Federal Reserve's impending monetary policy. Ahead of this report, the cautious behaviour of investors also kept the gold market lower on Thursday.

GOLD Intraday Technical Level

Support Resistance

1778.41 1792.51

1772.23 1800.43

1764.31 1806.61

Pivot Point: 1786.33

GOLD - Technical Outlook

The XAU/USD is currently trading at $1,777, having fallen below the $1,782 support level. The precious metal has breached an upward trendline support at 1,782 mark on the 2-hour period. The closure of candles below this level creates further leeway for selling until next support mark of 1,774. trendline, which supports gold's rise.

The 50-day exponential moving average at 1,780 represents a significant barrier for the precious metal. A surge in selling pressure below 1,780 might trigger a downward slope until 1,774 or 1,770. Conversely, a break beneath 1,774 would allow for more selling till the 1,762 level. All the best!