Market analyst Christopher Lewis states that gold markets fell a little during the trading session, but closed the week with positive signs. Market analyst David Becker, on the other hand, states that gold prices maintain their former resistance and now support close to the 50-day moving average at $ 1,798. Weekly gold analysis by Christopher Lewis and David Becker, cryptocoin.com compiled for our readers.
“Under $1,875 will be a major hurdle”
Analyst Christopher Lewis says that when he compares the weekly and daily chart, he starts to see more horizontal consolidation setup than anything else. “We created a shooting star on Friday,” said the analyst, which is of course a negative sign. However, the analyst states that the weekly candlestick looks somewhat attractive, which is of course positive. According to Christopher Lewis, this shows that the market doesn’t know where it wants to go, and the fact that we’re entering Christmas week probably exacerbates that a bit.
The analyst states that if the candlestick top is broken, $1,875 will be a major hurdle, on the other hand, if the candlestick is broken below, $1,725 will likely be seen. Either way, the market doesn’t want to put too much effort into moving things between now and New Year’s, according to Christopher Lewis, who probably thinks the only thing to count on is a lot of noisy behavior.
Recalling that there is currently a big fight in the bond market over whether the Federal Reserve can raise interest rates as much as they propose, or whether it’s just smoke and mirrors as usual, the analyst predicts:
Therefore, I guess gold will be very noisy and horizontal. So it probably plays better than anything from a short-term perspective.
Gold technical analysis: Short- and medium-term momentum turns positive
Gold prices rallied for the third consecutive session and ended the week with 1.25% gains. US rates were lower, with 10-years outperforming 2-years, allowing the curve to flatten to December lows and nearly 1-year lows. Meanwhile, manufacturing industry surveys show the US economy continues to strengthen. However, market analyst David Becker notes that the fear of spreading the Omicron variant has created additional volatility in riskier assets.
The analyst states that gold prices have risen, maintaining the old resistance and now supporting close to the 50-day moving average at $1,798. Support is seen near the 10-day moving average at $1,784. The short-term momentum has turned positive as the ‘Fast stochastic’ creates a cross-bought signal. The analyst states that prices are overbought as the Fast stochastic reaches 86 above the overbought trigger level of 80. The analyst says that as the MACD (moving average convergence divergence) index creates a cross-bought signal, the medium-term momentum is turning positive, and the MACD histogram is printing in positive territory with an upward sloping trajectory pointing to higher prices.
The manufacturing output index rose 0.7% last month to 100.6, the highest level since January 2019, according to the Federal Reserve. This came after a 1.4% rebound in October. Expectations were for a 0.7% increase in factory output. Production increased by 4.6% compared to November 2020. Manufacturing accounts for 12% of the US economy.
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