Gold Slips to $1,806, Upward Trendline Support at $1,797- Brace for a Buy Trade

The Fed is expected to release the minutes of its December monetary policy meeting soon. The minutes will reveal the expedited timetable for ending the pandemic era stimulus. The central bank has said it could raise interest rates three times in 2022. However, that will depend on keeping inflation at 2% a year, and unemployment at the ideal level of around 4%, which is a gauge for full employment. Rate hike reports always have a negative impact on gold prices; however, if inflation persists and remains strong throughout 2022, gold could rebound and even retrace the record highs of 2020, above $2,100. On the data front, at 19:45 GMT, the final manufacturing PMI came in, remaining flat at 57.7. At 20:00 GMT, the construction spending figures for the US were released, showing a drop by 0.4% in November, compared to the expected 0.8%, and weighing on the US dollar, which led to a further decline in the gold prices on Monday.

Gold has rebounded to just above $1,800, following a bullish reversal, after getting rejected at the $1,797 support. Below this, the next support can be found at around 1,790, which is being prolonged by the double bottom level. The closing of candles above the support level of 1,797 suggests the chances of an uptrend in gold.

A bullish break beyond the 1,807 level would expose gold to 1,819. The next resistance level is at 1,832, or even lower. There appears to be a bearish bias below 1,807 and vice versa.