GOLD PRICES FACE PRESSURE AGAINST THE DOLLAR AS OMICRON VARIANT SPREADS

Gold prices are currently holding steady around the $1,800 handle as a shift in risk sentiment boosts demand for safe-haven assets.

After central banks announced their plans to address rising inflation, concerns over the spread of the Omicron variant and a potential blow to Joe Biden’s $1.75 trillion investment plan fueled uncertainty, raising doubts over further economic growth.

Although the precious metal has been on a downward trajectory since the beginning of the year, the geopolitical backdrop may allow Gold and Silver to regain confidence, at least for now.

GOLD PRICE ANALYSIS

Gold prices are currently trading within a confluent zone, between key Fibonacci levels of both the 2020 and 2021 moves which continue to provide both support and resistance for the imminent move.

Although current price action currently remains below trendline resistance from the 2021 high in January, bulls have temporarily managed to drive XAU/USD back towards the key psychological level of $1,800 in an effort to reclaim possession over the systemic, prominent trend.

With fundamental factors now seeping into the global equity market, an increase in the demand safe-haven assets has forced the commodity channel index (CCI) into overbought territory on the daily chart as the demand for riskier assets continues to wane.

Gold (XAU/USD) Daily Chart

(Click on image to enlarge)

Chart prepared by Tammy Da Costa using TradingView

Meanwhile, on the weekly time-frame, prices continue to cling to the 50-period moving average but are facing resistance as the US Dollar maintains resilience against its major counterparts.

Gold (XAU/USD) Weekly Chart

(Click on image to enlarge)

Chart prepared by Tammy Da Costa using TradingView