Gold Price Analysis — January 6

Gold Price Analysis — January 6

Gold (XAU/USD) traded on a sideways pattern in the early European session on Tuesday, as the commodity struggled to capitalize on its bullish momentum from the previous two sessions.

It appears that the market has begun pricing in the possibility of a Democratic win in the crucial US Senate runoff elections in Georgia. The final election results will not be out until the end of today, albeit with the increasing likelihood of a Democrat-controlled Senate.

A Democrat-controlled senate will give President Joe Biden easier access to his preferred economic policies, including additional—and possibly larger—stimulus measures and infrastructure projects. This possibility has caused the US dollar (DXY) to come under immense pressure, thereby extending further support to the dollar-denominated commodity. Also, the prospects of stricter regulations for large tech companies—and the industry as a whole—caused the Nasdaq futures to slide by nearly 2%, which bolstered gold even further.

Meanwhile, the 10-year US Treasury yield rose beyond 1% for the first time since March on the expectations of larger government borrowing. This rise is probably the only factor capping gains for the non-yielding metal. Also, investors are hesitant to place any aggressive bets ahead of the FOMC minutes scheduled for later today.

In the meantime, the greenback’s price dynamics and the broader market risk sentiment will provide trading opportunities for the precious metal.

XAUUSD – 4-Hour Chart

Gold (XAU) Value Forecast — January 6

XAU/USD Major Bias: Bearish

Supply Levels: $1950, $1965, and $1980

Demand Levels: $1920, $1907, and $1900

At press time, gold appears to be stalling near the top of our ascending channel as bullish momentum dwindles. That said, we expect a sharp price correction in the near-term to the lower-$1900 area.

Our 4-hour MACD indicator pronounces the impending correction even better, as the commodity retreats from overbought territories.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
9.8
$100 Min Deposit
9.8
  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
8.5
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
Share with other traders!

Author : Azeez Mustapha

Avatar

Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.