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Gold edges higher as dollar eases; hawkish Fed limits gains

Gold prices edged up on Thursday as the dollar eased slightly, but comments from U.S. Federal Reserve policymakers suggesting the central bank could accelerate stimulus tapering weighed on the metal and kept it well below the key $1,800 mark.

 

·         Gold Price Forecast: $1,800 likely to cap XAU/USD’s road to recovery – Confluence Detector

Gold is in the green for the first time this week, attempting to recover a part of Wednesday’s sell-off to the three-week low of $1,779.

Thanksgiving Holiday in the US offers little motivation to the dollar bulls, as they consolidate the hawkish Fedspeak and minutes-led upside.

The sluggish price action in the yields and the greenback is aiding the rebound in gold price. Further upside appears elusive, as the $1,800 mark is likely to be a tough nut to crack for gold bulls.

Gold Price: Key levels to watch

The Technical Confluences Detector shows that the gold price is defending critical support around $1,790, which is the intersection of the SMA50 one-day, Fibonacci 38.2% one-month and Fibonacci 61.8% one-day.

If the sellers find a strong foothold below the latter, then the recent downtrend could resume towards the Fibonacci 38.2% one-day at $1,785.

Further south, the confluence of the Fibonacci 23.6% one-day and Bollinger Band one-hour Lower at $1,782 will guard the downside.

The next stop for gold sellers is envisioned at $1,779, the meeting point of the previous day’s low and the pivot point one-day S1.

On the flip side, gold bulls need acceptance above the powerful $1,797 hurdle, which is the convergence of the Fibonacci 23.6% one-month, pivot point one-day R1 and the previous day’s high. 

The next relevant upside target is seen at $1,800, the pivot point one-week S3.

The additional advances will then challenge the bearish commitments near $1,807, where the SMA200 four-hour, Fibonacci 161.8% one-day and pivot point one-day R2 merge.

 

·         Gold price remains well supported above $1,800 an ounce in 2022 - Scotiabank

Gold prices continue to languish below $1,800 an ounce as investors interpret the re-nomination of Jerome Powell to remain the head of the Federal Reserve as a hawkish development for monetary policy.

However, commodity analysts at Scotiabank said in a report Wednesday that the selloff in gold could be overdone and the precious metal price looks well supported in 2022.

 

·         Dollar reigns as hawkish Fed stands out among central banks

The dollar index, which measures the greenback against six major peers, eased slightly to 96.759, but still hovered close to Wednesday’s high of 96.938, the strongest level since July 2020.

The dollar was little changed at 115.355 yen, holding close to the overnight high of 115.525, a level not seen since January 2017.

The euro edged higher to $1.1210, but still traded within sight of the near 17-month low hit on Wednesday at $1.1186 after German business confidence slumped for a fifth straight month.

 

·         Analysis: ECB faces pressure to unlock bonds and avert market squeeze

 

·         BoE's Bailey says guidance is hazardous for central banks

Bank of England Governor Andrew Bailey said on Thursday that central banks took risks when they sought to provide guidance on what is likely to happen with interest rates during times of economic uncertainty.

 

·         German central bank warns of overblown property prices with the problem spreading

 

·         Supply chains add to Mexico economy slump, piling pressure on central bank

 

·         U.S. threatens escalation with Iran at IAEA next month

The United States threatened on Thursday to confront Iran at the International Atomic Energy Agency next month if it does not cooperate more with the watchdog - an escalation that could undermine talks on reviving a 2015 big-power deal with Iran.

Tehran is locked in several standoffs with the IAEA, whose 35-nation Board of Governors is holding a quarterly meeting this week.

 

·         Oil slips awaiting OPEC+ response to U.S.-led crude release

Oil prices ticked lower on Thursday with investors waiting to see how major producers respond to the emergency crude release by major consuming countries designed to cool the market, even as data pointed to healthy U.S. fuel demand.

U.S. West Texas Intermediate (WTI) crude futures fell 9 cents, or 0.1%, to $78.30 a barrel at 0201 GMT, extending an 11 cent loss on Wednesday.

Brent crude futures slipped 5 cents to $82.20 a barrel, after losing 6 cents on Wednesday.

  

·         European markets close higher despite Covid headwinds; Remy Cointreau up 13%

·         UK's FTSE 100 rises for fourth day as consumer stocks boost

  

·         COVID-19 UPDATES:

·         WHO calls special meeting to discuss new Covid variant found in South Africa with ‘a large number of mutations’

 

·         COVID-19 threatens to knock away Germany's last pillar of growth

 

·         Merkel’s push for German lockdown reportedly blocked as death toll passes 100,000

 

·         UK raises alarm over new COVID variant which could beat vaccines

 

Reference: CNBC, Reuters, Worldometers