Gold aspires to $1817 on retreating T-yields, weaker USD

The price of gold holds its latest gains above $1,816 amidst thin liquidity conditions. The worse-than-expected Initial Jobless Claims data that failed to support the US dollar on Thursday. The US Department of Labour said that Initial Jobless Claims for the week ended on December 24 jumped to 225K, and 9K above the previous week’s record. Continuing claims rose to 1.7 million in the week that ended on December 17, the highest since early February.

Once the data report was announced, gold prices increased as investors’ fears for a tighter labour market eased. Additionally, US Treasury bond yields dropped, with the 10-year benchmark yield falling five bps, down to 3.830%. Consequently, the greenback weakened, as shown by the US Dollar Index (DXY), which tracks the US Dollar performance against a basket of peers, diving 0.54%, at 103.901.

Gold Price advances after hitting a daily low of $1,803.30, gaining 0.83% during the US trading session. Gold prices have been boosted on the back of retreating US bond yields, which impacted the US dollar. Investors’ sentiment improved even though China relaxing Covid-19 policy keeps the health system pressured. At the time of writing, the Gold Index is trading at $1,816.40, up by 0.68%.

Wall Street extends its gains on the day before the year’s last trading day. According to the World Gold Council (WGC), global central banks bought Gold at the highest rate since 1967, likely led by Russia and China’s institutions. Central banks bought 399 metric tons of Gold in Q3, against 186 metric tons in Q1 and 88 metric tons in Q2 and Global central banks increased their holdings of Gold in Q3 by close to 400 metric tons.

The US economic docket will finish the year with the Chicago PMI on Friday. It will kick off the next year with a busy calendar, reporting S&P Global and ISM PMIs, labor market data, and the Balance of Trade.

Technically, on the daily chart, the Go0ld Index is still upward biased, though unable to crack December’s high of $1,833.29. Traders should be aware that the yellow metal prices have been tracking the 20-day Exponential Moving Average (EMA) since mid-November, and Gold is trading above its 200-day EMA. Therefore, further upside is expected.

Gold’s first resistance would be the MTD high of $1,833.29. A breach of the latter will expose June’s high of $1,879.45, followed by the $$1,900 mark. As an alternate scenario, the XAU/USD first support would be $1,800. Break below would expose the 20-day EMA at $1,792.78, followed by the 200-day EMA at $1,765.98.