Gold prices are posting slight gains around $1,810 during a sluggish period Monday morning. The yellow metal is cheering on the weakness of the US dollar as well as falling Treasury yields to print the latest gains around the month high on December 17.
“Market fears put pressure on gold prices”
Gold prices are struggling to defend the $1,800 threshold amid a stagnant session in Asia on Monday. Cryptocoin. com
As we reported , the yellow metal witnessed a lackluster session the previous day amid a bid across multiple global markets. However, the recent rise in virus fears, coupled with geopolitical headlines, has been straining gold buyers lately.
Fears of a faster spread of the Omicron variant are adding to market fears and putting pressure on gold prices, according to market analyst Anil Panchal. The average number of new coronavirus cases in the US rose 45% last week to 179,000 per day, while the UK and France have passed 122,000 and 94,000 daily cases at the latest, with a new daily Covid-19 case, according to Reuters’ calculation. they reported.
The jump in Covid cases also brings travel restrictions and limited activity at an otherwise busy time of year. “Commercial airlines around the world have canceled more than 4,500 flights over the Christmas weekend as a growing wave of Covid-19 infections caused by the Omicron variant has created further uncertainty and misery for holiday travelers,” Reuters reported.
Global developments that will affect the markets
On a different page, the Russia-Ukraine fight failed to benefit from Moscow’s drawing of 10,000 cannons from the exercise near Kiev, dubbed Christmas de-escalation by The Guardian. U.S. Vice President Kamala Harris said in an interview with CBS that the United States and Russia are holding talks on Ukraine, while German officials will hold a meeting with her Russian counterpart on Monday.
It’s worth noting that studies showing fewer hospitalizations due to Omicron and optimistic spending in the US keep gold buyers hopeful. A report from Mastercard shared by Reuters shows that US retail sales rose 8.5% from November 1 to December 24 during this year’s holiday shopping season. Also positive for gold was US Vice President Harris’ optimism about getting President Joe Biden’s Build Back Better (BBB) plan despite recent challenges raised by Senator Joe Manchin. Goldman Sachs voiced its doubts on the matter, making the following assessment:
While Congress is likely to approve some new spending on manufacturing and supply chain-related incentives, we no longer expect the Senate to pass the Build Back Better bill and short-term spending on the extended child tax credit extension.
Amid these games, US 10-year Treasury yields remain under pressure by around 1.48%, with S&P 500 Futures posting intraday gains of the latest 0.20%. The analyst states that a light calendar in the US and only the Dallas Fed Manufacturing Index for December, which is 13.2 against the previous 11.8, may limit short-term gold price movements.
Technical analysis of gold prices
The net rise above the 200 DMA keeps gold buyers hopeful to break through the two-month horizontal hurdle surrounding $1,814-16 despite the holiday mood, according to market analyst Anil Panchal. Following this, the analyst notes that double tops marked around $1,834 in July and September will return to the chart before the $1,850 threshold will challenge bulls trying to break past November’s $1,877 high.
Meanwhile, the analyst reminds that a bullish support line around $1,778 from August has contributed to the downside filters below the 200-DMA level of $1,797. In a situation where the golden bears break above $1,778, the $1,758 level could offer an intermediate stop before pulling the price down to September lows at $1,721 and the round figure of $1,700. Anil Panchal summarizes his analysis as follows:
Gold prices are rising, but it has a bumpy road to the north.