Market Update: has Gold started a new up leg?

December 17, 2021
by Joseph Jeffriess, Market Analyst

Hi traders, today we’re taking a look at gold after buyers put in one solid session yesterday lifting price back above 1799.

The move we are looking at started this week after the FMOC, at first price looked like it was going to break lower after the Fed advised it was going to cut back its bond-buying and laid out a rate rise plan for 2022. This came about as the Fed finally said that inflation could no longer be called transitionary. As mentioned the USD jumped at first but was then sold heavily and the selling continued yesterday as moved back into risk assets. The BOE surprised the market with a rate rise due to their ongoing inflation issues but the ECB continues to take a cautious approach suggesting we won’t see a rise based on the current conditions.

As we can clearly see gold buyers saw these updates as a real positive and piled back into the yellow metal after it had been range-bound for several weeks. The lower breakout rejection and bullish engulfing bar yesterday show that there’s plenty of buyer momentum in the market now. Price added 1.20% yesterday and broke out of its range and broke the downtrend.

Looking forward if fundamentals remain in favour we want to see if buyers can get back into the supply area and break it. That clears the last remaining resistance and then we will look for new higher lows and higher highs to form to show us that a new trend is underway. A move and close back in the range would be a small worry in our opinion.

Gold D1 Chart 

All times are AEDT.