GOLD PRICE OUTLOOK:
- Gold prices rise as danger aversion pulls down actual rates of interest
- Sentiment could stead amid news-flow lull, Omicron a wildcard
- Chart setup tilts cautiously bearish close to six-month vary axis
Gold costs managed good points regardless of a stronger US Dollar on Friday as danger aversion swept monetary markets. An ominously “stagflationary” configuration of responses throughout key asset lessons noticed a pointy fall in nominal charges outpacing a extra modest downshift in breakeven inflation expectations. That pushed actual rates of interest deeper into unfavorable territory boosting bullion’s store-of-value enchantment.
Wanting forward, a quiet begin to the buying and selling week brings little by means of scheduled occasion danger till November’s US CPI information hits the tape on Friday. Fed officers are in a blackout interval forward of subsequent week’s FOMC coverage assembly, so no main commentary is on the menu. This seems to be to have left the door open for a risk-on correction after Friday’s bloodletting. This may increasingly see gold costs retrace a little bit of not too long ago recovered floor.
Information circulation surrounding the still-mysterious Omicron variant of Covid-19 stays a wildcard. The baseline appears to be that this model is probably extra virulent however much less lethal than prior iterations. Headlines credibly difficult that set of assumptions – if Omicron was revealed to be extra deadly than anticipated, for instance – may set off volatility throughout monetary markets. Gold is unlikely to be immune.
GOLD TECHNICAL ANALYSIS – TILTING BEARISH NEAR 6-MONTH RANGE MIDDLE
Gold is retesting support-turned-resistance at a rising pattern line set from August lows. Extension greater sees resistance capped at 1808.16, with a day by day shut above that placing 1834.14 in focus. Alternatively, bearish resumption faces help anchored at 1750.78. Breaching that may expose 1717.89.
Gold value chart created utilizing TradingView
GOLD TRADING RESOURCES
— Written by Ilya Spivak, Head Strategist, APAC for DailyFX
To contact Ilya, use the feedback part under or @IlyaSpivak on Twitter