Gold prices were set for the fourth week in a row on Friday as cautiousness prevailed ahead of US inflation data that could prompt the Federal Reserve to cut bond purchases more quickly. However, despite the better-than-expected data, spot gold closed the day at $1,782.45, up 0.47%, while US gold futures closed at $1,784.8, gaining 0.46%.
“Gold prices may reach $1,805 if it breaks the 1.789 resistance”
cryptocoin.com As we reported, gold prices initially fell on Friday, closing the day up 0.47% after the data was released as investors were cautious ahead of the US Consumer Price Index report and next week’s Fed policy meeting. Stephen Innes, partner at SPI Asset Management, comments:
Gold defends the lower end of the $1,770-1,810 range. Because investors are worried about a hawkish Fed pivot. But there is still enough uncertainty around the Omicron variant that could delay the rate hike.
That’s why the bar is high for a hawker surprise, and long-term gold investors aren’t too worried about the decline, although it may weigh on gold in the short term, according to Stephen Innes, who states that the markets are already pricing in three rate hikes for 2022.
Reduced incentives and interest rate increases tend to raise government bond yields, raising the opportunity cost of non-interest bearing bullion. Spot gold could retest the resistance at $1,789 and a break above it could reach $1,805, according to Reuters technical analyst Wang Tao.
Investors are also weighing US jobless claims, which fell to their lowest levels in more than 52 years last week as labor market conditions continue to tighten amid acute labor shortages.
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