- Gold languished near a two-week low amid a positive rally in equity markets.
- The dovish USD price action extended some support to the dollar-denominated metal.
Update: Gold halted its rally early in the US session and fell to a fresh three-week low, around the $ 1,785 zone in reaction to the US mixed jobs report. The NFP headline showed the economy added 199,000 new jobs in December, disappointing estimates for a reading of 400,000. However, the disappointment was offset by an upward revision of the previous month’s reading to 249,000 from 210,000. Added to this, the unemployment rate fell to 3.9%, beating expectations for a modest drop to 4.1% from 4.2% previously, reaffirming expectations of an eventual take-off by the Fed in March.
This was evident by the high yields on US Treasuries, which, in turn, continued to act as a headwind for the underperforming yellow metal. That said, the modest weakness of the US dollar continued to provide some support to dollar-denominated gold. This, coupled with the cautious mood around equity markets, helped limit the slide for the XAU / USD safe haven. Nonetheless, spot prices are still on track to post their biggest weekly decline since late November.
technical perspective
From a technical perspective, this week’s rejection close from the $ 1,830-32 bid zone and the subsequent drop could have turned the bias in favor of bearish traders. Some subsequent selling below the horizontal support at $ 1,785 will reaffirm the negative outlook and set the stage for a further short-term depreciation move. Gold could accelerate the downward trajectory towards the intermediate support of $ 1,770-69 en route to the December 2021 low around the $ 1,753 zone.
On the other hand, the $ 1,800 level, which coincides with a technically significant 200-day SMA, now appears to act as a strong immediate resistance. Sustained force beyond could trigger a short hedging move and push gold prices towards the $ 1,815 hurdle. Some subsequent buying should allow the bulls to point back to challenge a strong barrier near the $ 1,830-32 zone.
Daily chart
Additional technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
