Gold Prices May Backtrack as Markets Steady, Omicron a Wildcard

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Gold Prices May Backtrack, Gold prices managed gains despite a stronger US Dollar on Friday as risk aversion swept financial markets

GOLD PRICE OUTLOOK

Gold Prices May Backtrack, Gold prices managed gains despite a stronger US Dollar on Friday as risk aversion swept financial markets. An ominously “stagflationary” configuration of responses across key asset classes saw a sharp fall in nominal rates outpacing a more modest downshift in breakeven inflation expectations. That pushed real interest rates deeper into negative territory boosting bullion’s; store-of-value appeal.

Looking ahead, a quiet start to the trading week brings little by way of scheduled event risk until November’s US CPI data hits the tape on Friday. Fed officials are in a blackout period ahead of next week’s FOMC policy meeting, so no leading commentary is on the menu. This looks to have left the door open for a risk-on correction after Friday’s bloodletting. This may see gold prices retrace a bit of recently recovered ground.

News flow surrounding the still-mysterious Omicron variant of; Covid-19 remains a wildcard. The baseline seems to be that this version is perhaps more virulent but less deadly than prior iterations. Headlines credibly challenging that set of assumptions – if Omicron was revealed to be more lethal than anticipated, for example – might trigger volatility across financial markets. Gold is unlikely to be immune.RECOMMENDED BY ILYA SPIVAKHow; to Trade GoldGet My Guide.

GOLD TECHNICAL ANALYSIS – TILTING BEARISH NEAR 6-MONTH RANGE MIDDLE

Gold Prices May Backtrack, Gold is retesting support-turned-resistance at a rising trend line set from August lows. Extension higher sees resistance capped at 1808.16, with a daily close above that putting 1834.14 in focus. Alternatively, bearish resumption faces support anchored at 1750.78. Breaching that might expose 1717.89.

Gold Prices May Backtrack

Gold price chart created using TradingView

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