These Developments and Data Will Determine The Gold Price Next Week!

Gold started the week under modest bearish pressure and closed in negative territory on Monday and Tuesday. Market analyst Eren Sengezer states that after a faint attempt to recover towards $1,800 on Wednesday, gold struggled to hold its ground and hit a one-month low of 1.761. The disappointing November jobs report from the US initially triggered a rebound on Friday, but failed to lure gold buyers and ended the third week in a deep decline, according to the analyst.

What happened to the markets last week?

cryptocoin.com As you can see in our news, safe-haven flows dominated financial markets ahead of the weekend amid renewed fears about the Omicron variant causing a slowdown in global economic activity. However, the market mood improved at the start of the week, with confirmed cases of Omicron in Europe and the UK showing mild symptoms. The analyst reminds that the yellow metal could not find demand as a safe haven and US Treasury bond yields rose.

Markets were once again risk-averse after the CEO of Moderna said on Tuesday that existing vaccines may be ineffective against the new variant and that it will take months for pharmaceutical companies to produce new vaccines specific to the new variants, he added. The analyst states that the gold price managed to record a stable recovery and climbed above $ 1,800, however, with the hawkish statements of FOMC Chairman Jerome Powell supporting the dollar, it erased its daily gains.

While testifying before the US Senate Banking Committee, Jerome Powell said it would be appropriate to complete the tapering several months ahead of schedule. Regarding the Omicron variant, Jerome Powell noted that they need to see more data to assess its potential impact on economic activity. Finally, the president noted that it is time to remove the term “temporary” from use when describing inflation in the United States.

Data from the US on Wednesday revealed that private sector employment rose by 534,000. Additionally, ISM Manufacturing PMI reached 61.1 in November, indicating that business activity in the manufacturing sector continues to expand at a strong pace. The Prices Paid component of the PMI survey fell from 85.7 to 82.4.

In the absence of top macroeconomic data releases, the dollar had no trouble outpacing its rivals and gold slumped to $1,761, its lowest level since early November. Meanwhile, Cleveland Fed President Loretta Mester voiced support for faster tapering so the Fed could have the flexibility to change the policy rate sooner if needed.

Agriculture, the U.S. Bureau of Labor Statistics said on Friday. It reported that Non-Finding Employment (NFP) rose 210,000 in November, narrowly missing analysts’ estimate of 550,000. Key details of the publication revealed that wage inflation, as measured by Average Hourly Earnings, remained steady at 4.8% year-on-year. That said, investors don’t seem to expect the bleak NFP pressure to change the Fed’s tapering outlook with the US Dollar Index and the 10-year US Treasury yield to easily return to pre-release levels after a knee-jerk backlash.

What will be on the agenda next week?

The Fed on Saturday, December 4 We will enter a blackout period and will not receive any comments from policymakers until December 16. However, market participants will be keeping a close eye on developments surrounding the Omicron variant. “We are confident that people who have been vaccinated and those who have received booster vaccines will have adequate protection against serious illness,” BioNTech CEO Uğur Şahin said on Friday. The Fed is likely to stay on the tightening path and limit attempts at a recovery for gold, as long as investors are confident that Omicron won’t put too much pressure on the healthcare system, even if vaccines need to be adjusted, he said.

The analyst states that risk perception may continue to drive financial markets due to the lack of high-impact data releases in the first half of the week. On Friday, the U.S. Bureau of Labor Statistics will release November Consumer Price Index (CPI) figures. Annual core CPI is expected to fall to 4.3% from 4.6% in October. As the October CPI pressure beat market expectations, gold rallied with the initial reaction. The analyst makes the following assessment:

We might see a similar reaction if the report shows that the CPI continued to increase in November. However, a hot inflation data will also support the dollar, not allowing gold to benefit from the data.

Gold technical outlook and gold sentiment survey

Market analyst Eren Sengezer states that despite rising above these levels, the gold price failed to close above the 100-day and 200-day SMAs twice this week, indicating that sellers will remain in the game as long as these resistances remain intact. According to the analyst, the Relative Strength Index (RSI) indicator on the daily chart remains near 40, confirming the view that gold’s recovery momentum is struggling. Eren Sengezer draws attention to the following technical levels:

On the downside, temporary support seems to be formed at $1,760 (December 2 low) ahead of $1,750 (static level). A daily close below the second level could open the door for additional losses towards $1,740. It is aligned as initial resistance before $1,780 (61.8% Fibonacci retracement of the latest uptrend), $1,790 (100-day SMA, 200-day SMA) and $1,800 (psychological level, Fibonacci 50% retracement).

The FXStreet Sentiment Survey points to a bearish trend in the near term, but the target of $1,770 average on the one-week outlook suggests losses may be limited. The analyst states that the monthly outlook paints a mixed picture with a 39% uptrend versus a 38% downtrend.

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