Market analyst Anil Panchal notes that the price of gold has remained flat so far in Tuesday’s trading, with bulls capped at the key $1,790 barrier while the downside is protected around $1,780. According to the analyst, the risk-free market mood and the safe-haven US dollar, which increases the upward pressure of gold, brings a new offer to gold. Meanwhile, the rapid spread of the Omicron covid variant and its potential risks to the global economy are reducing risk appetite. Emphasizing that while the Fed is trying to fight inflation, gold remains fragile, Anil Panchal’s gold price market and technical analysis, cryptocoin.com compiled for our readers.
According to the analyst, this provides extra support for gold prices.
On the other hand, the analyst states that US Treasury rates continue to be under pressure amid pre-Fed concerns, giving gold bulls hope. It looks like Fed sentiment and Omicron updates will continue to affect market sentiment and hence the shiny metal. The US PPI data will provide some trading opportunities as the two-day Fed meeting begins on Tuesday, according to the analyst. Anil Panchal evaluates the market agenda as follows:
The yellow metal’s recent recovery may be linked to the market’s risk-safety flurry amid much negative Omicron and geopolitics, not to forget the cautious mood ahead of critical central bank monetary policy meetings.
The analyst said at Wednesday’s Federal Open Market Committee (FOMC) meeting, market rumors surrounding the Fed’s faster tapering and hints of a rate hike are adding extra support to gold prices, contrasting with the latest weakness in US inflation expectations. Recently, global rating agency Moody’s underlined the sensitive decision that the US Federal Reserve (Fed) must make at Wednesday’s monetary policy meeting.
“For a new position, attention should be paid to virus news and central bank speeches”
On the positive side, pressure from the US Democratic Party to have a $1.75 trillion aid package by the end of 2021 seems to bolster stocks amid mixed concerns. Against this background, US 10-year Treasury yields hover around 1.42%, while S&P 500 Futures are posting slight gains.
The analyst warns gold traders to pay attention to virus updates and central bank speeches for any new venture. However, the analyst reminds that the US Producer Price Index (PPI) for November may offer intraday direction with an expectation of 9.2% versus 8.6% year-on-year.
Gold technical analysis
Market analyst Anil Panchal notes that gold has extended the bounce from the two-month horizontal support area, crossing the 100-SMA between the tighter RSI and a stable Momentum line. Short-term momentum supports buyers, while the 200-SMA and seven-week resistance zone at $1,808 and $1,815, respectively, could challenge the bulls. Anil Panchal points out the following levels in his analysis:
If the price crosses $1,815, the possibility of witnessing a rise towards $1,834, which includes highs set in July and September, holds the key at $1,850.
The analyst states that gold’s pullback action signals a bearish trend confirmed by a bearish break of $1,758, and is followed by a theoretical south run to renew the annual low of $1,687, reminding that gold sellers will be tempted. The analyst points to the following levels as support:
However, during the yellow metal’s decline past $1,758, it could test multiple support levels near $1,770, $1,745, and $1,721.
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