[[Gold ]] prices closed at $1,783.80, after hitting a high of $1,794.40, and a low of $1,774.00. After dropping for three consecutive sessions, the gold prices finally found some supportive ground and reversed course on Wednesday. The precious metal moved higher on the back of coronavirus fears, after the United States confirmed its first case of the Omicron coronavirus variant in California.

The patient, a traveler who returned to California from South Africa on Nov. 22, was isolated. The CDCP said that the individual was fully vaccinated and had mild symptoms that were improving. Furthermore, the close contacts of the individual have all tested negative. However, the concerns about the spread of the virus still prompted demand for safe-haven assets like gold, pushing its prices higher on Wednesday.

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Meanwhile, the rebound of gold from a 3-week low could also be attributed to the fact that traders were more concerned about the spread of the Omicron variant, coupled with comments by Fed chair Jerome Powell on the need to curb inflation. Researchers worldwide are racing to fully understand the impact of the Omicron variant, which was first identified in South Africa. To stop its spread, many countries have imposed travel restrictions, as concerns in the market, that the strain could potentially be immune to the protection of vaccines, have increased in the market. On the other hand, Fed Chair Powell reiterated that the central bank would keep inflation under control and consider speeding up the process of withdrawing policy support.

The US Dollar Index, which measures the greenback’s value against a basket of six major currencies, reached a level of 96.04. The United States Treasury yield, on a 10-year note, fell for the seventh consecutive session on Wednesday, dropping to 1.40%.

On the data front, at 18:15 GMT, the ADP Non-Farm Employment Change was released. It surged to 534K, against the anticipated 525K, supporting the US dollar and adding to the gains in gold. At 19:45 GMT, the final manufacturing PMI for November came in , showing a drop to 58.3, compared to the projected 59.1, which weighed on the US dollar. Construction spending remained flat at 0.2%. The ISM Manufacturing Price Index fell to 82.4, in contrast to the expected 85.5, putting downside pressure on the US dollar. These unfavorable macroeconomic figures added to the pressure on the greenback, pushing gold higher on Wednesday.

Gold – A Technical Outlook – XAU/USD breaks below $1,781

[[Gold ]] has slipped below the strong support level of 1,781, and it has now entered the oversold zone again. A surge in buying pressure could help gold to overcome a crucial hurdle at 1,781, taking the price to levels around $1,792 and $1,801.

Daily Technical Levels