Gold climbed more than 1% on Thursday, as the dollar fell after the Federal Reserve of the United States chose to hasten the withdrawal of its pand
Gold climbed more than 1% on Thursday, as the dollar fell after the Federal Reserve of the United States chose to hasten the withdrawal of its pandemic-era stimulus, which was a widely anticipated decision.
Gold was up 1%, to $1,795.41 per ounce (18:42 GMT). Gold futures in the United States rose by 1.9 percent, to $1,798.20. The dollar index (DXY) fell to a one-week low against its rivals, making bullion, which is priced in USD, more affordable for holders of other currencies.
The number of Americans filing new unemployment claims grew marginally last week, following the tightening of labor market conditions. The advance figure for seasonally adjusted initial claims for the week ending December 11 was 206,000, which was up 18,000 from the previous week’s revised level. Last week’s level increased by 4,000 points, rising from 184,000 to 188,000. The four-week moving average was 203,750, which was a decrease of 16,000 from the revised average of the previous week. This average has not been this low since November 15, 1969, when it was 202,750. Last week’s average was up by 1,000 points, from 218,750 to 219,750.
Other figures released on Thursday showed that economic activity is picking up steam as the year comes to a close. In November, manufacturing output peaked at the highest level in nearly three years, while homebuilding raced to an eight-month high.
The growing labor market and strengthening economy prompted the Federal Reserve to declare, on Wednesday, that it would terminate its pandemic-era bond-buying in March, paving the way for a three quarter-point interest rate rise by the end of 2022. According to Fed Chairman, Jerome Powell, the economy is “making rapid progress toward maximum employment.”
On Friday, trading in gold is sharply bullish at 1,803, violating the downward trendline at 1,789. On the 2-hour timeframe, gold is likely to gain immediate support at the 1,789 level. The closing of candles above this level supports an uptrend in gold.
On the higher side, gold is likely to find an immediate resistance at 1,814. At the same time, the break above the 1,814 level could lead the gold price towards 1,829. Stay tuned to FXLeaders trading signals for more updates. Good luck!
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