Gold Technical Analysis: Stability Awaiting Catalyst
Gold futures are trading in a relatively stable performance with a bearish bias as gold moved towards the $1,776 support level before settling around $1,782 as of this writing. According to recent trading, the rebounding stock market and the rise of the US dollar affected the yellow metal. With early data suggesting that the Omicron variant isn’t as serious as many had feared, investors were hitting the “buy” button across the stock market. In the last few weeks of trading, generally, gold prices began to exit a weekly loss of about 0.1%, in addition to its decline since the beginning of the year 2021 to date by more than 6%.
Silver, the sister commodity to gold, is retreating at the start of this week’s trading, as silver futures fell to $22.31 an ounce. The price of white metal fell more than 2% last week, intensifying its decline since the start of the year 2021 to date to nearly 16%. Investors were excited about the news that the worrisome Omicron variant was not as serious as many were initially concerned about. While it appears to be more contagious, it is not more deadly. This led to a massive rally in the financial markets, with major benchmark indices posting notable gains.
Moreover, the possibility of higher interest rates and Fed monetary policy will likely affect gold prices as well.
All eyes will be on US inflation figures on Friday. The market sets an annual inflation rate of 6.7% for the month of November. And if the forecast is accurate, the consensus is that a sharp CPI will support gold prices. Meanwhile, the strength of the dollar is affecting gold prices. The US dollar index (DXY), which measures the performance of the dollar against a basket of six major competing currencies, rose to 96.33, and the rise in the value of the dollar is bad for commodities priced in dollars because it makes them more expensive to buy for foreign investors.
On the other hand, affecting the gold market, US Treasury yields also rose on Monday, with 10-year yields rising to 1.426%. One-year yields rose to 0.264%, while 30-year yields advanced to 1.754%. A higher yield for Treasury bonds is a downward trend for metals because it raises the opportunity cost of holding non-yielding bullion.
Relative to the prices of other metals, copper futures rose to $4.309 a pound. Platinum futures rose to $936.80 an ounce. Palladium futures jumped to $1,848.00 an ounce.
Technical Analysis
Gold is being cautiously stable, waiting for any news or catalyst. The psychological resistance of $1800 will remain crucial for the bulls to control the performance, because it may stimulate buying, and therefore move towards stronger resistance levels, the closest of which are $1819, $1828 and $1845, which are the areas that strengthen the bullish trend. On the downside, the $1775 support will remain the key to more downside momentum. I still prefer buying gold from every descending level, and the most appropriate buying levels are currently $1763, $1750 and $1738. The price of gold may remain subject to the announcement of US inflation figures and developments on the ground regarding the COVID variant.
WTI Crude Oil Forecast: Price Trying to Break 200-Day EMA
At this point though, it looks oversold.
The West Texas Intermediate Crude Oil market rallied significantly to reach towards the 200-day EMA. The 200-day EMA attracts a lot of attention, and it is probably worth noting that the market had stopped there during the previous session. Crude oil was particularly vulnerable to hedge fund liquidation as it was one of the biggest positions a lot of them owned, so as fear of omicron took hold of market behavior, it was almost like a feedback loop. At this point, the market is likely to continue seeing plenty of value hunters though, especially as we are testing multiple areas of support.
The first thing that catches my attention is that we had formed a massive hammer at the $65 level, which also happened to be where the uptrend line crossed. During the Friday session, we tried to recapture a lot of the momentum, but failed at the 200-day EMA. At the time of writing, it looks like the 200-day EMA could very well be broken, and if we can continue to go higher, perhaps breaking above the $70 level, then I think it will be a rush back into this contract.
After all, it does look as if the omicron variant is not going to be as dangerous as once thought, and perhaps some of the initial overreaction may get worked against. Short-term pullbacks at this point in time will probably continue to find buyers, as this looks like a significant bottoming pattern, especially as people realize that perhaps not much has changed. While OPEC did decide to go ahead and increase production as per schedule, the reality is that if the market continues to reopen, that will almost certainly demand more crude oil. I think that is probably what’s going on here, so every time it pulls back it is very likely to attract not only value hunters, but maybe small positions by myself. I will be adding as we go higher, as it could very well be a bigger move towards the $75 level. The 50-day EMA sits just above there, so would make a certain amount of sense that it could offer a nice target or perhaps even a short-term ceiling. If we break down below the bottom of the hammer from the Thursday session though, that could open up fresh selling in a leg lower. At this point though, it looks oversold.
To get ACCURATE LIVE ACCURATE 2-3 TRADES (Forex/Comex/Stocks) Telegram Financial Advisor
XAUUSD FOREX INDICES ACCOUNT MANAGEMENT
How can I get a forex gold trader to trade for me?
How can I earn in XAU/USD pair?
#SaudiArabia #UAE #Qatar #HongKong #Portugal #PortugueseGP #France #forex #commodities #forexSaudiarabia #forexYemen #forexasia #forexJordan #Singapore #UAE #UK #forexsignals #SwingTrading
Rehana William |Financial Consultant _Forex_Gold Xauusd| Fund Manager 