Gold registered limited gains last week, climbing to $1,820 per ounce by the end of the week, from approximately $1,795 per ounce at the start of the week. Even though last week showed a marked decline in the dollar, gold prices failed to take off as some investors expected. As fears over the Omicron variant abate and economic data indicate future recovery, risk-appetite grows, which doesn’t favour the safe-haven asset. Rising real yields also limit gold’s appeal as an investment, as it doesn’t pay dividends or interest.
On Monday, there was little volatility in the price of gold, which traded sideways around the $1,820 per ounce level. If the price of gold climbs, it may find resistance at $1,829 per ounce, while if the price of gold decreases, the $1,800 level may provide support, while further down, support may be found at 1,782 per ounce.
Traders should keep an eye on upcoming economic and inflation indicators in the US. On Tuesday, the Empire State Manufacturing Index is an important economic indicator, as it reflects economic health and future economic activity. Gold traders should also keep an eye on real yields, since rising real yields negatively affect the price of gold.
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