The market trading sentiment managed to stop its early-day declines, drawing some fresh bids ahead of the European sessionResistance remains at 1,793,
- The market trading sentiment managed to stop its early-day declines, drawing some fresh bids ahead of the European session
- Resistance remains at 1,793, and a bullish breakout at this level could lead the gold price towards 1,800
- Gold is gaining support at 1,786 and currently trading at 1,788, with a bearish bias
The safe-haven metal, gold, failed to stop its previous long downward rally, falling for the fourth day in a row, renewing an intraday low of $1,786, as it headed into Monday’s European session. The prices of the yellow metal are expected to fall for the first time since September 2021. The declines could be linked to the ongoing upbeat market mood, which undermines safe-haven investments and leads to decreases in gold. The Federal Reserve took a more hawkish stance, indicating that it may hike interest rates more quickly than expected, in an effort to combat rising inflation. Thus, the hopes of a more aggressive Fed response, combined with rising US Treasury bond yields, has driven the US dollar to its highest level since July 2020. The dollar was bolstered even further by the release of the advance US GDP report on Thursday, which revealed that the world’s largest economy grew at an annualised rate of 6.9% in the fourth quarter. The economy grew at am annual rate of 5.8% in 2021, the fastest in nearly four decades. Thus, the stronger dollar was another factor that put some pressure on the dollar-denominated commodity, gold. The XAU/USD pair is trading at 1,789.09, and consolidating in the range between 1,785.60 and 1,791.70.
Despite the worsening coronavirus conditions in Japan and the escalating requirements for hospital beds in Tokyo, the market trading sentiment managed to stop its early-day declines, drawing drew some fresh bids ahead of the European session on Monday. The reason could be tied to the positive news surrounding the market. Over the weekend, Australia’s most populous state announced relief measures for small and medium-sized businesses. On Sunday, the NSW government launched an AUD 1 billion package to help small and medium-sized enterprises cope with the Omicron wave. According to ANZ, on February, payments of up to AUD 5,000 per week will begin for firms with revenue of between AUD 75,000 and AUD 50 million.
Gold (XAU/USD) – A Technical Outlook
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