GOLD Analysis – December 20, 2021

Gold’s Daily Price Analysis

Gold prices ended the day at $1804.90, with a high of $1815.70 and a low of $1796.50. Despite the strength of the US dollar, gold continued its gains on Friday and rose for another session. This week, the precious metal remained high, posting its first weekly increase in five weeks after rising 0.8 percent. The US dollar fell this week when the Federal Reserve of the United States chose to withdraw its pandemic-era stimulus. This reduced the bullion price for holders of other currencies and increased gold prices.

Gold reached its highest level since November 26th during early trading hours on Friday, but it quickly lost its early gains and turned flat for the day after experiencing selling pressure in late trading hours due to the rising strength of the US dollar. The US dollar index, which measures the greenback's value against a basket of six major currencies, reversed direction and went green on Friday, recouping the majority of its previous daily losses and reaching 96.69. In contrast, the US Treasury Yield on the benchmark 10-year note maintained its bearish momentum, falling to its lowest level since December 6th, at 1.37 percent.

Given his estimates for inflation and labour market conditions, Fed Governor Christopher Waller stated on Friday that the Fed might raise interest rates immediately after the bank completes its asset purchases early next year. He also stated that he supports the plan to accelerate the pace of bond cutting beginning in January since it will allow for other monetary policy adjustments as early as spring to accommodate changes in the economic outlook. Waller's words added strength to the already surging US currency and drove it higher.

On the other hand, yellow metal increases could be attributed to growing concerns prompted by the fast-spreading Omicron variety. For example, the market saw a surge in demand for precious metals as a safe haven after New York state declared a record number of positive cases for the second day in a row, with approximately 22,000 instances. As Omicron spread, restaurants and bars were closing their doors before the holidays, despite no-restriction announcements from governments. On Friday, the United Kingdom reported over 25,000 confirmed cases of coronavirus, which was 10,000 instances more than the previous day.

Furthermore, the Group of Seven (G7) health ministers stated that the Omicron type of coronavirus was the most serious threat to global public health since it was fast spreading throughout the world after being reported in at least 77 countries. The growing number of warnings about the Omicron strain, as well as its continued spread over the world, increased the market's attraction to safe-haven assets, sending gold higher for the day.

GOLD Intraday Technical Level

Support Resistance

1799.09 1802.54

1797.22 1804.12

1795.64 1805.99

Pivot Point: 1800.67

GOLD - Technical Outlook

On Monday, gold contitnue to trade with a slight bullish bias at 1,803, having bounced off the support level of 1,795. Gold is likely to find immediate support at the 1,791 level in 2 hours timeframe. The closure of candles above this level indicates that gold is rising.

Gold’s next resistance stays on the upside at 1,814 levels. At the same time, a break over the 1,814 barriers might expose the gold price up to 1,829. The RSI and Stoch are signaling uptrend in gold. All the best!