VOT Research Desk
This week’s first day of trading for gold has seen modest losses so far, breaking a four-day upswing in the process.
In a risk-off market environment, the United States Dollar’s (USD) prolonged resurgence is putting pressure on the price of the dazzling metal.
Gold traders maintain their composure while waiting for a new round of significant economic developments from the US. Prior to Federal Reserve Chair Jerome Powell’s address, Wednesday’s ADP Employment Change and the second estimate of the US Gross Domestic Product (GDP) will be attentively examined.
At the Brooking Institution in Washington, DC, Fed Chair Powell will discuss the labour market, inflation, and the prospects for the economy. Powell’s remarks will be highly relevant before Friday’s crucial US Release of Nonfarm Payrolls.
On November 27, China recorded a sixth consecutive day with a record of 40,347 new COVID-19 infections. This sparked protests against President Xi Jinping’s covid-Zero policy in cities all throughout
China and put the Communist Party’s hold on power in jeopardy. Large bearish opening gaps in the risky assets were caused by these anti-covid lockdown protests in China at the beginning of the week. The demand for the US Dollar as a safe haven skyrocketed amid market turmoil and panic, putting pressure on the US Dollar-dominated Gold price.
Gold Technical Analysis:
The price of gold is extending its consolidation phase above $1,747 on Monday following a bull flag breakout last week.
This level is the 23.6% Fibonacci Retracement (Fibo) of the most recent rally from the $1,617 low on November 3.
The 21 and 100-Daily Moving Average (DMA) bullish crossover maintains the upward potential alive, while the 14-day Relative Strength Index (RSI) is still in the bullish zone.
The round number $1,770 is followed by Friday’s high of $1,761 as the next level of topside resistance.
On the other hand, a break of the crucial Fibo support level at $1,747 stated above will allow for a test of the $1,720.
The climbing 21DMA and 38.2% Fibo level intersect at that point. Gold will be saved further down, at the horizontal 50DMA at $1,712.
