Gold consolidates below $1,800 as risk sentiment stabilizes on hopes the Omicron variant will be mild. The US dollar and Treasury yields rebound limits gold's gains, though virus concerns could push prices higher. Technical indicators show gold struggling between support and resistance levels around $1,785-1,800.

1. XAU/USD Rebound Remains
Capped Below $1,800 As Sentiment
Stabilizes

2. Points To Be Discussed Today:
• Gold Consolidates Its Rebound
• Gold Price Has Recaptured
• Gold (XAU/USD) Reverses
• Technical Analysis
• Fundamental Overview
• Economic Calendar

3. Gold Consolidates Its Rebound
• Gold consolidates its rebound below $1,800
amid stabilizing risk sentiment.
• Virus variant challenges market sentiment but
US dollar weakness sounds fishy ahead of
Fed’s Powell.
• Treasury yields dropped and drowned the DXY
but US Health Officials are confident and save
the greenback.

4. The US Dollar Rebound
• With the renewed optimism that the effects of
the new Omicron covid variant will likely be
mild, the risk sentiment is stabilizing in Asia
this Monday, which is limiting the recovery
momentum in gold price.
• Further, the US dollar rebound alongside the
Treasury yields’ keeps gold bulls in check.

5. Gold Price Has Recaptured
• However, if the virus concerns escalate, then gold
price is likely to extend its rebound above the
$1,800 mark.
• Technically, with the latest upturn, gold price has
recaptured the critical resistance around $1,792,
where the 50, 100 and 200-Daily Moving
Averages (DMA) coincide.
• A daily closing above the latter is needed to
initiate a meaningful recovery from the previous
week’s tumble in the bright metal.

6. Gold (XAU/USD) Reverses
• Gold (XAU/USD) reverses late Friday’s
pullback from $1,815 during Monday’s
Asian session.
• In doing so, the metal keeps the previous
day’s bounce off a two-month-old
support line amid market fears
emanating from the coronavirus strain,
dubbed as ‘Omnicron’.

7. Gold Prices Posted A Volatile Day
• Grave symptoms like heavy mutations and the
ability to resist vaccines enable Omicron to
challenge the market’s previous optimism and
calls for tighter monetary policies.
• The same weighed down the US Treasury
yields and the US Dollar Index (DXY) the
previous day but gold prices posted a volatile
day with no gains amid mixed beliefs over the
US dollar and the Fed’s next step.

8. Inflation Fears
• The US National Institutes of Health (NIH) officials
convey no cases of the stated virus variant in the
world’s largest economy and remain hopeful that
the virus vaccines, as well as the booster doses,
can help overcome the fresh challenge.
• However, Atlanta Federal Reserve President
Raphael Bostic rejected market talks that the
virus strain will ease inflation fears by saying,
“Covid is the source of inflation.”

9. S&P 500 Futures
• Elsewhere, Canada and Australia are the latest
ones to join the UK, Europe and South Africa
to find cases of the COVID-19 variant whereas
many counties have rejected flights from
Africa and surrounding countries.
• Even so, S&P 500 Futures print mild gains
whereas the US 10-year Treasury yields jump
4.5 basis points (bps) to 1.53% at the latest.

10. Gold Traders
• Moving on, gold traders should keep their
eyes on Fed Chairman Jerome Powell’s speech
for fresh impulse, as well as comments from
US President Joe Biden.
• Should Fed’s Powell cite grave concerns due
to the recent virus variant breakout, the
bullion prices are likely to rise more.

11. Technical Analysis
• Gold struggles between a two-month-old
support line and a convergence of the 100-day
and 200-day EMAs.
• Hence, a clear break of the $1,785-1,800 area
becomes necessary for the traders to get a fair
view of the near-term trend.

12. Technical Analysis - I
• However, the bearish MACD signals and a
likely pick-up in the US dollar’s safe-haven
demand challenge the gold buyers.
• Other than the $1,800 threshold, the latest
swing high near $1,815-16 may also challenge
the metal’s upside momentum before
challenging the $1,834 barrier comprising
highs marked in July and September.

13. Technical Analysis - II
• It’s worth noting that the horizontal line of
$1,850 adds to the upside filters before directing
the quote to the monthly high of $1,877.
• Alternatively, a downside break of the $1,785 will
quickly fetch gold prices to an ascending support
line from August, near $1,760.
• Should the gold bears keep the reins past $1,760,
the bullion becomes vulnerable to test
September’s low of $1,721, a break of which will
direct the bears to aim for the yearly low of
$1,687

14. Gold: Daily Chart

15. Fundamental Overview
• Gold (XAU/USD) pokes intraday high to mark
the heaviest daily run-up in a week, up 0.55%
around $1,799 heading into Friday’s European
session.
• The yellow metal benefits from the plunge in
US Treasury yields to extend the previous
day’s recovery moves, mainly due to the covid
variant woes.

16. Fundamental Overview - I
• That said, the 10-year bond coupon drops the
most since July and its two-year counterpart
marking the heaviest fall since March 2020
amid fears over the COVID-19 variant.
• The fall in the Treasury yields also weigh on
the US Dollar Index (DXY), down 0.09% near
96.68 by the press time.

17. Fundamental Overview - II
• It’s worth noting that the woes concerning the
coronavirus strain don’t allow equities to benefit
from the softer yields and receding chatters over
the Fed rate hike.
• With the US traders returning from the
Thanksgiving Day holiday, although for a smaller
session, the risk-off mood may get an additional
boost, which in turn could propel the gold
prices towards the north of the $1,800 hurdle

18. Fundamental Overview - III
• However, Fed policymakers haven’t yet
stepped back from the rate hike calls,
neither did inflation numbers.
• As a result, the gold buyers will need a
stronger push to cross the immediate
resistance.

19. Economic Calendar

20. XAU/USD Rebound Remains
Capped Below $1,800 As Sentiment
Stabilizes

21. Thanks for listening
XAU/USD Rebound Remains Capped
Below $1,800 As Sentiment
Stabilizes