Gold is trading below $1,800 on Monday, posting minor losses as weakened market conditions due to the holiday combined with broad-based US dollar recovery. cryptocoin.com As we reported, traders are also cautious ahead of this week’s US inflation data as the Fed lagged behind the curve following Friday’s upside surprise in wage hike numbers.
“Challenges to market sentiment may put pressure on yellow metal”
Market analyst Anil Panchal states that the US Non-Farm Payrolls data has broken the dollar in general and increased the price of gold. Despite the Fed’s rate hike seeming to be over in March, the shiny metal has firmly rebounded from a three-week low of $1,783 despite the Treasury yields bursting, according to the analyst.
All eyes will be on Fed Chairman Jerome Powell’s statement on Tuesday and Wednesday, while US inflation data will be closely watched. Gold prices, on the other hand, show typical market inactivity in the absence of key data/events due to recent mixed signals from the US jobs report and global coronavirus cases.
However, the analyst notes that a disappointment caused by the NFP has been largely overridden by the Unemployment Rate and the U6 Underemployment Rate, which appears to challenge recent market sentiment. As a result, market bets on the Fed’s rate hike in March 2022 remain around 80% after rising to 90% ahead of Friday’s data.
Gold traders will be watching the US Consumer Price Index (CPI) and Retail Sales data for December, which will be released on Wednesday and Friday, respectively, to confirm March’s rate hike. The analyst reminds that challenges to market sentiment could put pressure on gold prices.
Gold technical analysis: MACD signals bearish
According to market analyst Anil Panchal, the corrective pullback from an ascending support line from early August to around $1,785 by press time is failing to push gold buyers once again to $1,800, the 200-DMA. The analyst draws attention to the following levels:
The rebound failure joins the bearish MACD signals and the stable RSI to keep sellers hopeful of breaking the $1,785 support, which will drag the precious metal towards $1,770 before challenging multiple levels near $1,760.
That said, a clear break below $1,760 would be a green signal for golden bears to target September lows at $1,721. The analyst makes the following assessment for the alternative situation:
Alternatively, the 200-DMA surrounding $1,801 is holding the price higher just ahead of a sideways area created from late October and surrounding $1,815. However, highs marked around $1,834 in July and September will challenge further progress. If gold buyers manage to break through the $1,834 hurdle, the $1,850 and November peak of $1,877 will capture the market’s attention.
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