Gold prices fell below $1,800 and continues to trade just below. Meanwhile, industrial materials rallied after concerns over the Omicron coronavirus variant subsided and increased risk appetite despite the World Health Organization’s call for caution. Market developments and their effects on gold prices, Cryptocoin. com for our readers, accompanied by analysts’ evaluations and analyzes.
“The panic over the Omicron variant eases over the weekend”
Markets slumped on Friday as the emergence of a new Covid-19 variant raised concerns that the global economic recovery could be derailed, the Bloomberg Commodity Spot Index said. But some calm returned to markets on Monday after two South African health experts suggested that the variant has shown mild symptoms so far. U.S. stock futures rose on crude oil, while Nickel rose more than 2% and led a rally among base metals. Iron ore rose more than 9% in Singaporean markets.
Jinrui Futures Co.,Ltd. In a note on Monday, he makes the following assessment of the market effects of the new Covid variant:
The panic over the Omicron variant is easing over the weekend. If Omicron’s death rate and severity of symptoms are limited, its impact on capital markets will be controllable.
Howie Lee: We expect a period of high volatility even in industrial metals
Nevertheless, investors remained cautious after the World Health Organization’s call to be careful, saying that it will take time to evaluate the new variant. On the other hand, a series of flight bans and broader measures aimed at reducing the spread of Omicron have wreaked havoc on airlines, passengers and some businesses. Oversea-Chinese Banking Corp. Economist Howie Lee expresses his expectations as follows:
Overall, we expect a period of high volatility, even for industrial metals. The true impact of the virus is currently unknown. Depending on how the situation develops, we may see a rebound or an ongoing sell-off. The more clarity we expect will come in two weeks
Gold, a traditional safe-haven in times of uncertainty, shed 0.5% in London markets, trading at $1,793.88, while Comex futures rose 0.4%.
Gold prices erased much of the November rally and are almost back to where they started, as investors debate whether the Fed should remove policy support faster to keep inflation in check. Atlanta Central Bank Governor Raphael Bostic considered the risk of the new variant on the US economy insignificant. Here’s how OCBC’s Howie Lee comments:
The market is wary of the impact of the Fed’s increasingly hawkish stance on interest rates, despite virus fears. In the short term, we expect more funds to flow into safe-haven assets such as gold. However, in the long run, we expect the normalization of global interest rates to limit gold prices.
Important levels to watch for gold prices
The Technical Confluences Detector used by market analyst Dhwani Mehta is at 1.799-1, which is the intersection of gold prices, one-month Fibonacci 23.6% and one-hour Middle Bollinger Band. It shows that it will face stubborn resistance at $800. The analyst states that if the second resistance collapses, 61.8% of Fibonacci at $1,802 can be tested. Moreover, golden bulls will need extra flavor to clear the critical Fibonacci 38.2% one week at $1,807. Dhwani Mehta points out the following levels in his technical analysis:
The confluence of the four-hour SMA200 and the one-day R1 pivot point at $1,809 will challenge bearish commitments. The next stop for gold bulls is seen around $1,816, where the previous week’s high, the previous month’s high, and the one-month R1 pivot point converge. On the flip side, the sudden drop seems to be protected by a dense cluster of healthy support levels near $1,795.
At this point, the analyst states that one-week Fibonacci 23.6% coincides with one-day SMA100, one-day Fibonacci 38.2% and one-day SMA200. The next area of demand at $1,789, the one-month Fibonacci 38.2% will kick in, below which the bottoms will open towards Friday’s low of $1,780.55.
Technical Confluences Detector
