The direction of the February Comex gold market into the close on Tuesday will likely be determined by trader reaction to the 50% level at $1864.90.
Gold Price Futures Technical Analysis – Gold futures tumbled over 4% on Friday as a jump in U.S. Treasury yields hammered the non-interest bearing, non-dividend paying investment. With investors chasing the yield in bonds, gold has become a funding asset.
Gold futures closed about 25% higher last year with most of the gains occurring between March 16 and August 7 when the central banks and governments were still announcing and implementing aggressive monetary and fiscal stimulus plans. Since that top, however, gold has struggled as economies started to emerge from recessions and policymakers gained a better understanding of the developing financial crisis.
The direction of the U.S. West Texas Intermediate and international-benchmark crude oil futures market this week is likely to be determined by trader reaction to the OPEC+ meeting on January 4 that will decide new production levels.
Holding above $2.685 will indicate the presence of buyers, but a move over $2.760 could trigger an acceleration to the upside.
Gold futures closed lower on Friday but a late session rally prevented a much steeper loss. Nonetheless, the market dropped to its lowest level in over a week early in the session before posting its second straight weekly decline. The catalyst behind the weakness was a strong rebound in the dollar and a resurgence in U.S. business activity.
Gold futures are trading higher late in the session on Friday after posting a choppy, two-sided trade earlier in the session. The market is in a position to post about a 5% gain for the week, its best performance since March 27.
U.S. West Texas Intermediate crude oil finished higher on Wednesday after a government report showed U.S. crude oil and refined product inventories fell sharply last week due to a notable drop in crude imports.
U.S. West Texas Intermediate and Brent crude oil futures finished mixed last week as inventories rose and record-breaking new coronavirus cases in the United States stoked concern about the pace of economic recovery and fuel demand. Meanwhile, the International Energy Agency (IEA) raised its 2020 oil demand forecast, but also warned that the spread of COVID-19 posed a risk to the outlook.
Gold futures are edging higher on Thursday shortly before the regular session opening and the release of the U.S. Non-Farm Payrolls report at 12:30 GMT. The report carries a lot of risk so the price action is likely being fueled by position-squaring.