Forex Marketz Daily Forex News – Fully Markets Update
Last week, the spot gold futures contract was range bound at first before dipping to its lowest price point in two months at $1,753 per ounce on Wednesday. The metal then recovered going to the weekend closing above $1,800. This ended a four weeks in a row of losing ground.
By Tuesday, gold was under selling pressure. Economic data showed that the U.S. producer price index (PPI) rose at their strongest pace in more than a decade. November’s producer price index came in at 9.6 percent. This caused traders to start thinking that the Federal Reserve would be more hawkish. This sent gold to $1,770 per ounce.
On Wednesday, the Federal Reserve announced that they will double the pace of asset taper to $30 billion per month from January. The central bank’s new Summary of Economic Projections signaled three rate hikes in 2022 with two or three more in 2023. This sent the spot contract tumbling lower to its weakest price point since October at $1,753 per ounce.
Daily Spot Gold Technical Analysis
Looking at the above daily spot gold futures contract (XAU/USD) chart, on Thursday prices climbed above the two hundred (200) day simple moving average for the first time since late November.
On Friday, the spot contract was above the December high price point at $1,814. The relative strength index (RSI) is above fifty which could be good for the bulls.
The 38.2 percent Fibonacci level is immediate resistance. A daily close above that opens the door for the 23.6 percent Fibonacci level. This level lines up near $1,835.
On the downside is the fifty percent Fibonacci level and psychological level of $1,800 is immediate support. The 50 and 100 day simple moving averages are also support levels to watch. The 100 day simple moving average lines up at $1,790 per ounce. The 61.8 percent Fibonacci level is near $1,780.
