Gold Heading To Support Territory Before Christmas

The price of gold is down on the New York session by 0.35%. The price has fallen from a high of USD 1,804.17 to a low of USD 1,791.78 so far. Spot trades at USD 1,792 as it moves in toward what would be expected to be a strong area of support.

The US stocks are lower in midday trading as the spread of the omicron variant of COVID-19 amid peak holiday travel and a setback for US President Joe Biden’s spending plans hit investor sentiment.

The S&P 500 slumped 1.7% to 4,540.89, the Nasdaq Composite fell 1.8% to 14,891.14, and the Dow Jones Industrial Average declined 1.8% to 34,725.21.

The Netherlands entered a full lockdown Sunday in an effort to stem omicron’s spread, while several other European countries, including the UK, were contemplating similar restrictions before Christmas.

Omicron is now present in 45 of 50 US states, according to data from the US Centers of Disease Control and Prevention.

The price is embarking on the support are on the short term charts with USD 1,790 guarding the way to USD 1,780 as per the daily chart’s support area:

Despite a broadly risk-off market tone and an underperforming US dollar, spot gold (XAU/USD) prices are struggling to make headway on Monday. Prices are currently flat on the session but have slipped back from earlier session highs in the USD 1805 area to current levels around USD 1797 in recent trade. The 50-day moving average at USD 1795 provided support earlier in the session, but if this level goes, XAU/USD is likely to slip back to test early/mid-December highs and the 200DMA in the USD 1790 area.

Gold’s performance on Monday owes itself to the fact that real yields in the US have been advancing. 10-year TIPS yields, to which gold is very sensitive, are up about 2bps on the day and back to the north of the -1.0% level. But that still leaves the 10-year TIPS yield well within recent December ranges of about -1.1% to -0.9%. 5-year while yields are current up about 4bps but are also within recent week’s ranges.