Gold Prices Rebound But are Capped by Rising Yields

Gold prices moved higher for a second consecutive trading session but could not push through resistance. The dollar was higher, rebounding after Friday’s decline as U.S. Treasury yields moved higher across the curve. The stronger wage inflation figures weigh gold prices despite the weaker payroll report. Later this week, the Labor Department will release CPI.

Technical Analysis

Gold prices rallied for a second consecutive trading session. Resistance is seen near the 200-day moving average at 1,800.  Support on the yellow metal is seen near the December lows at 1,753. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is negative as the MACD (moving average convergence divergence) index is generated a crossover sell signal. This situation occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

Goldman Believes There will be 4-Rate Hikes in 2022

Goldman Sachs on Sunday wrote in a note to clients that it now figures the Fed to enact four quarter-percentage-point rate hikes in 2022, representing an even more aggressive path than the central bank’s indications of just a month ago. The Fed’s benchmark overnight borrowing rate is currently anchored in a range between 0%-0.25%, most recently around 0.08%.