Gold Price Bounces Off Trendline Support to Trade Above $1,780

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The gold price (XAU/USD) on Friday bounced off the trendline support in the 60-min chart to trade above the 100-hour moving average. The price of the yellow metal has now rallied to trade above the $1,780 level amid increased risk-off trading.

The gold price is now pinned just off the trendline resistance in a gently descending channel formation. As a result, the XAU/USD has now climbed to trade closer to the overbought conditions of the 14-hour RSI.

Gold Price Fundamentals Overview

From a fundamental perspective, gold seems to be riding tailwinds from the increased threat of the Omicron variant. The latest strain of the covid-19 pandemic is nothing like scientists have ever seen before in the previous strains. As a result, investors are taking their money off risky assets and putting more in safe havens like gold.  The yellow metal also seems to be befitting from the latest round of the US data, with non-farm payrolls failing to impress.

The US Jobs Data for November came in at 210k compared to an expectation of 550k. In addition, the average hourly wage growth also missed the mark, growing by 4.8% (YoY) in line with October, compared to an expectation of 5%. On the other hand, the unemployment rate impressed by falling to 4.2%, down from 4.6% in the previous month, and above the expectation of 4.5%. Earlier in the week, the US ISM Manufacturing PMI for November slightly beat the estimate of 61 with 61.1.

Gold Price Technical Analysis (the 60-min Chart)

Technically, the XAU/USD seems to be trading within a gently descending channel formation in the 60-min chart. However, Friday’s rebound pushed the price of the yellow metal above the 100-hour moving average, closer to overbought conditions of the 14-hour RSI.

Therefore, the bulls will be targeting upward channel breakout profits at about $1,792, or higher at $1,802. On the other hand, the bears will be targeting pullbacks at about $1,773, or lower at $1,764.

Gold Price Technical Analysis (the Daily Chart)

In the daily chart, the XAU/USD seems to be trading within a sharply descending channel formation. This indicates a significant long-term bearish bias in the market sentiment. 

Therefore, the bears will be looking to extend the current bearish run towards $1,752, or lower to $1,723. On the other hand, the bulls will be targeting long-term profits at around $1,814, or higher at $1,847.

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