Gold pricesyellow decline after FOMC Minutes. US 10-year Treasury yields jumped to a nine-month high after Fed minutes, while virus woes and the ADP Employment Change weighed on bonds.
The hawkish Fed pushes the gold bullion price
Kriptokoin.com , participants in the FOMC Minutes noted that the FOMC’s changes in outlook stated that it should continue to be prepared to adjust the pace of acquisitions if necessary. In addition, most participants in the minutes decided that if the pace of improvement in the recent labor market continues, the rate hike conditions can be met in a relatively short time. Moreover, given the outlook for the labor market and inflation, it was emphasized that the policy rate could be increased sooner or faster than participants previously anticipated.
The yellow metal fell nearly $20 after the Minutes of the FOMC Meeting conveyed the hawkish bias of policymakers that it proposed a faster rate hike and plans to discuss balance sheet normalization. Following the minutes, Fed interest rate futures point to an 80% chance of a rise in March 2022 as US bond yields rise.
Labor data meanwhile points to strong US ADP Employment Change for December given 807k versus expected 400k. For this reason, statements such as “if the recent recovery in the labor market continues, the conditions for an interest rate hike can be met in a relatively short time” from the Fed Minutes also prompted the US bond coupons. Market analyst Anil Panchal evaluates the developments as follows:
December’s US Commodity Trade Balance and ISM Hizmedollarser PMI’s monthly results, as well as weekly data on US Unemployment Claims will be very important for gold fiadollaryel. If US statistics continue to beat cautious forecasts, the possibility of a faster Fed rate hike cannot be ruled out, which will attract gold sellers. That’s why Friday’s US Non-Farm Payrolls (NFP) will be key.
“Gold is in a bull trend, but bulls have a bumpy road ahead”
Analyst Anil Panchal says gold is moving within a three-week uptrend channel supported by the RSI pullback. And yet, he states that sustained trades above the 100-SMA are challenging short-term bears. Otherwise, multiple barriers to the north are ready to challenge the golden bulls. Anil Panchal points out the following resistance levels in his technical analysis:
Among them, the 61.8% Fibonacci retracement from mid-November to December is bearish, around $1,830, signs in July and September 2021 and close to $1,834. it acts as a sudden resistance before the peaks.
Additionally, the analyst is challenging gold’s rise before the upper line of the indicated channel, close to $1,838 at the latest, directs buyers to its mid-November low of $1,850. The analyst points to the following support levels:
On the other hand, the convergence of the channel support line and the 100-SMA near $1,800 becomes key support and a breakout will remind gold sellers aiming the $1,780 and $1,760 levels. Overall, gold remains on an upside trajectory but the bulls have a bumpy road ahead.