Gold justifies the technical breakdown amid sour sentiment during early Thursday. That said, the yellow metal holds lower ground near $1,790, the lowest in two weeks by the press time. Fed tapering woes, virus-led economic fears and stimulus chatters keep bears hopeful.
Gold Price Outlook & Reports: Yellow Metal to average around $1750 next year
Analysts at Societe Generale provide their medium to long-term outlook on gold price, with the bright metal seen averaging around $1750 in 2022.
Gold Updates:
“We still remain slightly supportive in the near-term as we expect monetary and fiscal policy to remain highly accommodative but our conviction levels are simply pinned to our expectation that ETF outflows do not continue and we have some moderate inflows by the end of the year.”
“With positive economic readings and in particular, positive jobs data market participants appear to be focused on the prospect of an earlier than an anticipated interest rate hike. While real rates are still expected to be negative, any expectation that this could turn positive faster would really dampen investment flows.”
“Our base case scenario is for gold prices to average $1,750 on average in 2022 as investment flows drop further.”
“In the upside price scenario (which is the downside economic scenario), we forecast prices rising to $2,100/oz whereas the downside risk to prices (on the upside economic scenario) is limited and prices could fall to $1,600/oz.”
Gold Price Forecast: Bears pressuring, but bulls not giving up
Gold Current price: $1,791.72
- Demand for the greenback overshadows that of gold in risk-averse scenarios.
- The Bank of Canada maintained its monetary policy unchanged as expected.
- XAU/USD trades sub-1,800 and has room to extend its slump.
Spot gold bottomed for the day at 1,782.09 and currently trades at around 1,792. The bright metal accelerated its slump during US trading hours and following the Bank of Canada´s monetary policy announcement. The American currency was already advancing but got a short-lived boost from the BOC as it retained the status quo, keeping its monetary policy unchanged as expected.
Additionally, European indexes closed in the red although off intraday lows. Wall Street also trades in the red, but trimmed most of its early losses. Meanwhile, US Treasury yields eased from their recent highs, with that on the 10-Year note currently around 1.35%.
Gold price short-term technical outlook
Gold has fallen for three days in a row and has room to extend its slump. The daily chart shows that it has broken below all of its moving averages, with the 20 SMA maintaining its bullish slope and converging with a Fibonacci resistance, the 50% retracement of the March/June advance at 1,769.10, the immediate resistance level. Meanwhile, technical indicators have partially lost their bearish strength, the Momentum around its 100 level and the RSI at 46, the latter skewing the risk to the downside.
The 4-hour chart shows that the pair is also trading below all of its moving averages, while technical indicators consolidate at weekly lows and near oversold readings. The slump could gather momentum on a break below 1,769.10, the 61.8% retracement of the mentioned rally.
Support levels: 1,787.55 1,769.10 1,760.00
Resistance levels: 1,796.70 1,810.40 1,825.10
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