top of page
Writer's pictureanalysiswatch

Title: Gold Price Forecast: XAU/USD struggles near weekly low amid renewed USD buying


Dec 09, 2021 9:04 PM ET


By: AnalysisWatch


After a brief consolidation at the start of the trading session, the gold price saw fresh selling on Thursday and fell further back from its weekly high reached the previous day.


The intraday selling picked up pace during early North American trading and pulled the XAU/USD price back closer to the weekly low and below $1,775 in the last hour. This was the second consecutive day of negative performance, fuelled by renewed US dollar buying interest, which tends to lead to a churn in the dollar-denominated commodity.

The USD was in demand again, reversing some of the overnight profit-taking in the face of the Fed's restrictive expectations. Investors seem convinced that the Fed will be forced to tighten monetary policy sooner rather than later to curb stubbornly high inflation. This was seen as another factor undermining demand for gold without yield.

However, the low-risk stimulus, reflected in generally weaker equity market sentiment, supported traditional safe-haven assets and helped limit XAU/USD losses.


Mixed headlines about the Omicron variant of the coronavirus dampened recent optimism. In a laboratory test, BioNTech and Pfizer announced on Wednesday that a three-dose administration of their COVID-19 vaccine was able to neutralise the Omicron variant. However, this was overshadowed by the fact that British Prime Minister Boris Johnson imposed new COVID-19 restrictions in England on Wednesday to slow the spread of the new variant. This combined with escalating geopolitical tensions, dampened investors' appetite for perceived riskier assets.

1 view0 comments

Comments


bottom of page