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Gold prices face serious resistance against the US Dollar pullback and rising bond yields

The US-China trade optimism dampens the commodity's safe-haven demand. However, the gold price remained well within a narrow trading band.

gold price trend

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The gold prices face serious resistance against the US Dollar pullback and rising bond yields. The US-China trade optimism dampens the commodity’s safe-haven demand. However, the gold price remained well within a narrow trading band, held over the past three sessions. During trading yesterday, gold fell from 1,244.23 USD to 1,242.80 USD per ounce, but this morning recovered to 1,244-1,245 USD per ounce.

Signs of easing US-China trade tensions continued denting the precious metal’s safe-haven status, though the negative factor was partly negated by a weaker tone around the European equities. Meanwhile, the US Dollar extended its retracement from near one-month tops and was seen extending some support to the dollar-denominated commodity.

The US consumer prices were unchanged in November, supporting the view that inflation stayed firm but not enough to push the U.S. Federal Reserve to take a more aggressive stance. The markets are expecting not more than one rate hike from the Fed next year, after a likely interest rate increase at the Federal Open Market Committee (FOMC) meeting on December 18-19.

Spot gold was down 0.2% at 1,243.91 USD per ounce, as of 0415 GMT, while the US gold futures were 0.1% lower at 1,249.3 USD per ounce.

The market sentiment is neutral today. There is a little more positive sentiment than anticipated from US-China trade tensions, which is weighing on the topside. The US dollar hasn’t made many moves and that’s the real signpost for gold as they are still highly correlated.

Spot gold looks neutral in a range of 1,240-1,253 USD per ounce, and an escape could suggest a direction.

The silver was up by 0.1% at 14.75 USD per ounce, while platinum climbed by 0.3% to 800.49 USD.

Gold price analysis

Gold has spent the week so far consolidating on support after breaking above the 1,243 level last week. So far the price action is uninspiring in that we aren’t seeing follow-through, but will continue to respect support for as long as we don’t see gold slice back into the 1,230 USD area. If it does then the lower parallel off the November low will come into focus, followed by the trend-line off the August low.

Looking higher, with support holding, a move could develop to the 200-day MA at 1,254 and falling and then the upper parallel of the developing bear-flag since the summer and upper parallel of the short-term channel from last month.

gold price

After bottoming in August, gold has been climbing higher. The uptrend has created the bullish cup-and-handle pattern and should result in a breakout to the upside. We see nothing in the way of this move as all technical indications show there is underlying strength.

In today the gold overcomes the resistance zone 1,247.03-1,247.81 USD, it will target reaching and testing the zone 1,252.42-1,252.81 USD. Upon success, the upward trend will continue to 1,255.49-1,256.26 USD.

If the gold falls below the support zone of 1,239.34-1,238.57 USD, the next support will be the zone 1,235.89-1,235.51 USD. In the case of breakthrough, the downward trend will continue to 1,230.88-1,230.11 USD.

Palladium price analysis

Among other precious metals, spot palladium was down by 0.2% at 1,258.90 USD per ounce, having touched a record high of 1,264.25 USD earlier in the session. The palladium rose strongly on the news that China would be reducing tariffs on US imported autos, raising hopes that the sector would be boosted by additional demand, analysts at ANZ said in a note.

The metal, used mainly in emissions-reducing autocatalysts for vehicles, has gained about 49% since mid-August. Palladium continues to fire long signals on all indicators and to make new highs and is now challenging gold as reduced auto tariffs from China boost demand expectations in an already tight market.

However, a few analysts said palladium’s rally could run out of steam, and there could be profit-taking at these high levels.

Silver price analysis

During trading yesterday, silver rose its value from 14.51 USD to 14.54 USD per ounce.

This morning it is traded at 14.58 USD. Silver continues to push ever so slightly higher and is currently squaring off with resistance at current levels in the 14.70 USD area up to 14.91 USD. There were numerous tops back in October/November, making it a tough spot to climb through.

If the silver overcomes the resistance zone 14.64-14.66 USD, it will target reaching and testing the zone 14.77-14.78 USD. Upon success, the upward movement will continue at 14.85-14.87 USD.

If the silver falls below the support zone 14.45-14.43 USD, the next support will be the zone 14.37-14.36 USD. In case of a breakthrough, the downward trend may continue to 14.24-14.23 USD.

Silver trends