Gold Technical Analysis: Gold Gives Up Some Gains

  • Amidst profit-taking sales, XAU/USD gold prices are trying to hold on to the resistance level at $1775 an ounce, to continue the bullish trend.
  • The price of the yellow metal has tried to find more support from the dollar and treasury yields.
  • In general the XAU/USD gold price is trying to erase its losses in 2022 after its impressive rise of 4.2% over the past month.

 In the same performance, the price of silver, the sister commodity to gold, is also looking to shed more of its losses in 2022. Silver futures contracts fell to $ 22.335 an ounce. And the white metal has been on a tear for the past two months, wiping out nearly all of its losses. Silver prices fell by as much as 25%.

The overall weakness in the US currency has been a major support for gold in recent weeks. Although the US Dollar Index (DXY), a measure of the greenback against a basket of other major currencies, ended the day above 105.50, after weakening significantly since it peaked at 114.78 in October. A lower dollar rate is good for dollar-denominated commodities because it makes it cheaper for foreign investors to buy them.

In addition, US bond market yields also weakened in daily trading before ending the trading session in positive territory. The benchmark 10-year yield rose 3.3 basis points to 3.546%. The one-month bond yield rose 3.3 basis points to 3.772%, while the 30-year yield jumped 3.6 basis points. The spread indicating a two-year and ten-year recession remained at -80 basis points.

Gold is generally considered sensitive to a rising interest rate environment because it raises the opportunity cost of holding non-yielding bullion.

Economic Outlook

In terms of economic data, US imports rose 0.6%, or $2.2 billion, to $334.8 billion in October. But US exports fell 1%, or $1.9 billion, to $256.6 billion. Overall, the US trade deficit widened to $78.2 billion, which was just short of the market estimate of -$80 billion. Moreover, the Logistics Managers Index fell for the second consecutive month to a reading of 53.6, the second lowest reading on record, behind the figure of 51.3 in April 2020.

In other metals markets, copper futures fell to $3.8095 a pound. Platinum futures fell to $994.40 an ounce. Palladium futures remained unchanged at $1851.50 an ounce.

XAU/USD gold price forecast today:

So far, the stability of the XAU/USD gold price around and above the $1775 resistance. According to a performance on the daily chart below, it gives bulls a strong opportunity to hold on to the bullish trend. If it returns to break the $1788 resistance, that might push the price towards the psychological resistance $1800 an ounce again.

On the other hand, and for the same time period, the XAU/USD gold price's break of the support levels at 1760 and 1738 dollars will be important to change the direction of gold to bearish. The price of gold today will be affected by the level of the US dollar and whether or not investors are willing to take risks.

Ready to trade our Gold prediction today? Here’s a list of some of the best XAU/USD brokers to check out.

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Mahmoud Abdallah
Mahmoud has been working fulltime in the Foreign Exchange markets for 12 years. Offers his analysis, articles and recommendations at the most renewed Arabic websites specialized in the global financial markets, and his experience gained a lot of interest among Arab traders. Works on providing technical analysis, market news, free signals and more with follow up for at least 12 hours a day, and aims to simplify forex trading and the concept of trading for his audience.

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