Precious metal prices on Friday settled slightly higher. Gold on Friday closed +0.38% and Silver closed up +1.00%. A weaker US Dollar on Friday supported the metal’s gains along with lower T-note yields as there was increased price pressure due to global demand for gold as an inflation hedge, after the US November CPI rose +6.8%, the largest year-on-year increase in nearly 41 years. Gold continues to be supported as a safe-haven from the negative impact of the spread of the delta and omicron variants of Covid around the world on the world economic recovery.
XAUUSD, D1
Gold prices against the US Dollar last week traded in a range bound between 1761.85 and 1808.63 with a total weakness of 0.11% in the weekly inside pin-bar pattern. Signals favouring a rise in asset prices this week would be a test of the trend line on the relative strength index (RSI) or a rebound from the latest low that served as minor support at 1761.85. If the cancellation of the option goes up, the asset price will fall and a break of the 1761.85 price level will target 1750.00 before moving further to the support level 1721.59 and the year low at 1676.77.
On the upside, a break of the 1808.63 minor resistance will target the 1834.00 resistance and the asset price will have to sit back above the 1834.00 resistance to confirm the value growth. However, the price of 1800.00 will temporarily become a dynamic resistance, which is also the 200-day exponential moving average.
XAUUSD,H4
The intraday bias temporarily looks neutral below the round number 1800.00 level but selling pressure cannot be ignored, especially since the price is below the 200 EMA moving average. A break of the minor support 1761.85 would trigger some selling to send the price lower to 1750.00. As long as the support at 1761.81 or the lower trendline holds, it is possible that there will be see some price fluctuations this week. On the upside, there would need to be a test of the minor resistance 1703.02 and 1808.63 before being able to retest the resistance level 1834.00.
Overall, asset prices tend to be more towards consolidation which is confirmed from transaction data in the form of slim monthly body candles.
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Ady Phangestu
Market Analyst
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