Last week, gold fluctuated and rose, maintaining an upward tentative attitude. The price of gold once broke through the key resistance suppression around $1,824, and then quickly fell back at around $1,833. $1,833 is the multiple top position in the second half of 2021, although the time span is relatively large , but it is a meaningful price position on the technical side and has a certain depressing effect.
Although gold has risen and fallen back, it has always adhered to the key support position of the daily Bollinger Bands, and relied on this support to rebound and test. This has been staged many times in December 2020. Since then, gold prices have risen and approached the key pressure position of $1,824 again. However, until last week’s close, no effective breakthrough has been made.
This Monday, the market was closed due to New Year’s Day. After the market opened on Tuesday, the price of gold directly opened higher at $1,826. After testing the key support of $1,824, it quickly stabilized and rose. Due to the resistance around $1,833, the time span is relatively large, and the suppressing effect is limited. After a successful breakthrough in the gold price after 2 hours of testing, it rose by $10 in the short term, and then continued to surge higher, refreshing the recent six-month high of $1,850 , however, the U.S. dollar rose sharply during the session, putting pressure on the price of gold. It is currently trading around $1,835, giving up most of its gains.
Huang Lichen, a star analyst at Wolfinance, believes that the sharp rise in gold on the first trading day of the new year is due to a technical breakthrough after a month of continuous stagnation on the one hand, and on the other hand, it is related to this week’s Federal Reserve meeting. The December meeting had a huge impact. The Fed raised interest rates by 50 basis points in December last year after raising interest rates by 75 basis points four times in a row. As the market turned its attention to this week’s Fed meeting, gold got a buying boost .
In terms of news, the minutes of the Federal Reserve’s December (2022) policy meeting will be released on Wednesday, which may provide new clues to the Fed’s monetary policy, as investors seek confirmation of the lower Fed terminal interest rate shown on the dot plot, which will support gold prices. In addition, the geopolitical situation is still tense. Under the energy crisis caused by the conflict between Russia and Ukraine, Europe will spend a cold winter, and the expectation that the economy will fall into recession this year will support gold prices. In addition, central banks around the world will buy a large amount of gold at the end of 2022, and the Fed will slow down the pace of interest rate hikes, which will also benefit gold prices.
Overall, during this period of time at the beginning of the new year, gold is usually very illiquid, and the price of gold is driven by buying, which is more technical buying than fundamentals, which makes it more difficult for gold to maintain its gains . On the daily chart, the price of gold opened higher this week and made a breakthrough on the technical side. The price of gold continuously surpassed the resistance suppression near US$1,824 and US$1,833, and continued to maintain an upward test posture; Running, on the attached indicators, the MACD indicator re-forms a golden cross, the RSI indicator golden cross goes up, the KDJ indicator goes up into the overbought area, the CCI indicator is overbought, gold is bullish, short-term prices are overbought, and attention needs to be paid to correction needs.
Gold intraday reference: Since the price of gold is mainly driven by technical buying, be wary of the risk of rising and falling, and focus on the support positions around $1,833 and $1,824. Short-term operations are mainly based on falling and doing long.