Gold Price Forecast: Gold prices plunged heading into London’s close, hitting $1,766.38 a troy ounce. The dollar gathered momentum following the release of the US Producer Price Index, which hit a record 9.6% YoY in November, higher than anticipated.
Government Bond yields
The core reading, which excludes energy and food prices, printed at 7.7%. Government bond yields ticked higher while stocks plunged as the figures revived inflation-related concerns heading into the US Federal Reserve decision.
The US central bank has announced it would discuss speeding up tapering, and market participants speculate it will stop buying bonds after reaching $30 billion per month, following the announcement in November to reduce at $15 billion per month.
Meanwhile, investors are trying to assess the effects of the coronavirus Omicron variant on economic growth. Specialists are still not sure whether the strain is more deadly, but for sure is more contagious, leading to restrictive measures in the northern hemisphere.
Gold Technical Forecast By Neal Bhai
Spot Gold (Yellow Metal) bounced from the mentioned low, but retains a good bunch of its intraday losses, currently trading around $1,772.00. The near-term picture is bearish, as the 4-hour chart shows that the metal fell below its 20 SMA after meeting sellers around a firmly bearish 100 SMA.
The Momentum indicator remains flat around its midline, but the RSI indicator anticipates additional declines by heading south near oversold readings. A breakthrough of the mentioned daily low exposes 1,745, monthly low.
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