Gold prices support further gains - 2 January 2018

By: DailyForex

With gold prices moving above the psychological peak level at $1300 an ounce at the last 2017 trades on last Friday, it helped the yellow metal maintaining the upward momentum and now have a better opportunity to achieve more record gains. With the markets back to work and having more liquidity, the gold moved towards resistance at $1308 an ounce. The gold took advantage of the US index, which measures the greenback’s strength against a basket of 6 currencies, retreating towards 92.26, and the drop of the US treasuries, to achieve gains. The gold is moving within upward channel as shown on the daily chart, but within tight ranges, even with the strong pressures on the dollar after the passage of the US tax cut bill. It seems that the increased move towards crypto-currencies after the recent record gains, especially the for the Bitcoin, contributed to reduced interest in buying gold, as the recent gains were lower than usual in light of a lower dollar.

The investors got rid of the bonds in fear that the passage of the US Tax low will lead to a sudden increase in the inflation and will force the Federal Reserve Board to increase interest rates sharply in 2018. The interest rate raise expectations failed to support the US dollar as it usually does. The passage of the US tax law a direct strong support for the US dollar.

Technically:

Gold prices will have a strong bullish move today if the prices moved towards the resistance levels at 1315 and 1325. Settling on top of the $1300 peak will contribute to a successful move to those levels. The nearest support levels for gold are currently at 1272, 1285 and 1295. We still prefer buying the gold from every bearish level.

Gold Price

On the economic data front today:

The gold will have full focus on the dollar’s level with no important economic data, aside from the manufacturing PMI from the UK. The gold will also monitor updates regarding renewed geopolitical fears regarding North Korea, BREXIT or Trump’s economic policy.  

The DailyForex.com team is comprised of analysts and researchers from around the world who watch the market throughout the day to provide you with unique perspectives and helpful analysis that can help improve your Forex trading.