After a wild ride to the downside, gold price managed to secure a daily close above $1,800 on Wednesday. But bears are in control this Thursday amid stronger Treasury yields, and the cautious market mood and lower US dollar index (DXY) are helping to put a floor below the gold price, according to market analyst Anil Panchal. Technical analysis of Anil Panchal along with the developments in the market. cryptocoin.com compiled for our readers.
“Precious metal buyers confused”
The analyst notes that technically, the shiny metal is holding onto the 50-Day Moving Average (DMA) amid an upcoming bullish crossover on the daily bars. On the data front, mid-range US economic data was mixed and had little impact on the metal’s price. Traders are now waiting for US weekly Unemployment Claims data for fresh trade momentum. However, the analyst reminds that year-end flows will have a larger role going forward.
US 10-year Treasury yields jumped 7.6 basis points (bps) at the end of Wednesday’s North American session to rebound to a three-week high to renew their monthly high of 1.557%. The analyst states that the reason for this situation may be related to a disappointment caused by the weak seven-year bond auction.
Stronger rates may also be linked to recent strong expectations for the Fed to raise rates earlier in 2022. Louis (FRED) 10-Year Breakeven Inflation Rate figures, a jump in US inflation expectations) also bolstered the Fed’s rate hike woes. The analyst makes the following assessment:
In the midst of these games, gold buyers were confused as the yellow metal failed to hold the corrective retracement from the crucial DMA support. However, weak year-end liquidity conditions curb hope for clarity, even if the aforementioned risk catalysts and US data are likely to offer intermediate moves.
Gold technical analysis: Golden bears likely to take control
Market analyst Anil Panchal notes that despite bouncing off the 100 and 200 DMA, gold prices remain below the MACD’s two-week ascending trendline, supported by the descending bullish trend and stable RSI. Golden bears are likely to remain in control given the precious metal’s failure to bounce back beyond previous support and multiple failures to cross the horizontal area from late October. Anil Panchal points to these technical levels:
However, the 200 and 100 DMA levels around $1,798 and $1,791 respectively are forcing the metals further down. Following this, $1,772 could offer an intermediate stop before leading gold prices to a support zone comprised of multiple lows near $1,762-60 that has marked since Oct.
Meanwhile, a daily close beyond the aforementioned horizontal resistance around $1,814 would need confirmation from the previous support line, currently around $1,822, to call back gold buyers.
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