Gold futures were flat at the end of trading last week, despite turmoil in global financial markets. In Friday’s session, the price of gold fell towards the support of $ 1,766 and, after announcing the details of the US jobs report, found an opportunity to correct up to the level of. resistance of $ 1783 and settling at $ 1786. Gold prices were flat after the disappointing US jobs report. Additionally, with fears of the omicron variable and fears of rising inflation making headlines in this market, traders are holding on to gold.
The gold price recorded a weekly loss of around 1.2%, increasing its loss from the start of 2021 to date, which is around 7%. As for the price of silver, the sister commodity of gold, it is still lower, and silver futures have fallen to $ 22,145. Thus, the white metal has recorded a significant weekly decline of more than 4%, which raises its decline since the beginning of the year 2021 to date, to approach 17%.
Economically, according to the US Bureau of Labor Statistics (BLS), the US economy created a total of 210,000 new jobs in November, well below the average estimate of 550,000. ‘down from 546,000 jobs in October. The unemployment rate fell to 4.2%, beating market expectations by 4.5%. This is a decrease from the 4.6% rate recorded the previous month. According to the results, the average hourly wage rose 0.3% to $ 31.03, the average weekly working time increased to 34.8 and the labor force participation rate jumped to 61.8% .
On the flip side, investors are still scared of the omicron variant as traders wait for the latest updates from the World Health Organization (WHO) and countries around the world. In the United States, five cases of the omicron variant have been confirmed so far. The current trend is that no deaths associated with the new strain of COVID have been reported.
Although the US central bank has indicated it may start scaling back its pandemic stimulus and relief program more quickly, which could raise interest rates faster, experts note that it could be a pill hard to swallow if the omicron starts to affect savings. âOf course, there are a lot of factors to watch for gold right now, but the fact that the central bank’s hands are tied means that the bad news around the Omicron variant may not be bullish,â he said. said Craig Erlam, chief market analyst at OANDA. in a note to customers. “Unless, of course, the central bank prioritizes the economy over inflation, that would be a huge risk.”
The US Dollar Index (DXY), which measures the performance of the US currency against a basket of six major rival currencies, rose to 96.35, and in general, a larger profit is bad for commodities. base denominated in dollars as this makes them more expensive to purchase. for foreign investors. In addition, the bond market was mostly down on Friday, with the benchmark 10-year bond yield falling to 1.409%. One-year bond yields fell to 0.259%, while the 30-year bond yield rose to 1.735%. Lower Treasury yields are good for metals as they reduce the chances of holding unproductive bullion.
In other metals markets, copper futures fell to $ 4.267 per pound. Platinum futures fell to $ 923.50 an ounce. Palladium futures hit $ 1,815 an ounce.
In the short term, and from the performance on the hourly chart, it appears that the price of gold is trading within the formation of a descending channel. However, Friday’s rebound pushed the price of the yellow metal above the 100-hour moving average, near the overbought levels of the 14-hour RSI. Therefore, the bulls will target profit for a breakout of the bullish channel around $ 1,792 or more at $ 1,802. On the flip side, bears will target withdrawals at around $ 1,773 or less at $ 1,764.
In the long term, and from the performance on the daily chart, it appears that the price of gold is trading within the formation of a strongly descending channel. This indicates significant long-term bearish momentum in market sentiment. Therefore, the bears will look to extend the current downtrend towards $ 1,752 or less at $ 1,723. On the flip side, bulls will aim for long term profits of around $ 1,814 or more at $ 1,847.