Key points

• Prospects of U.S. Stimulus keeps buyers optimistic
• Risk appetite ticked up on vaccine news
• Buyers struggle at the $1850.00 handle

The prospect of an imminent U.S. stimulus package is holding up prices of commodities including precious metals. Extra liquidity in the financial markets will trigger a bullish run on precious metals similar to the March asset buying frenzy. Additional money supply intended to spur economic recovery carries with it the negative effect of eroding the value of fiat currency in the long run. Therefore, whether it is Quantitative Easing and or Debt Monetisation by the Federal Reserve, the overall effect is the devaluing of the currency. Based on this relationship, long term gold buyers will remain in the market until such policies have been altered.

The risk appetite in the markets has been ticking up as more Covid-19 vaccine headlines continue to flood the market. The global equities have remained buoyant with U.S. major equity indexes reaching new All-Time-Highs. Funds are flowing into equities as optimism about the reopening of the global economy heightens. Manufacturing and Industrial production data has started to display some level of recovery. The latest being the Chinese Industrial production data for the month of November which recorded an impressive 7.0% against a previous reading of 6.9%.

Gold Daily Chart.

Bulls are struggling to break the $1850 resistance region and such weakness will likely trigger a selling bout in the market. On the downside, gold is displaying a tendency to collapse towards the descending support line which is approximately at the same region as the 200 MA. The prior breakout below the $1850 region found support at the 200 MA, thus if prices re-test this region it may create a double bottom formation which will be good for the bulls around the $1750 handle.

Gold has been drifting further away from monthly ascending channel and a strong re-entry is seemingly out of reach for the meantime. Prices are now swinging in a descending channel (indicated by blue lines) as gold slowly reclining from the $2079.00 ATH. If prices collapse below the 200 MA at the $1750 region that might be an indication of a major change in trend direction.

Trends

Moving Average	Simple	Exponential
60	1874.76 SELL	1867.75 SELL
100	1909.68 SELL	1861.77 SELL
200	1809.36 BUY	1803.37 BUY

Pivot Points (Daily)

Name	S3	S2	S1	Pivot	R1	R2	R3
Gold	1832.50	1835.85	1838.75	1842.10	1845.00	1848.35	1881.25
Silver	23.89	23.96	24.01	24.09	24.14	24.21	24.27
Platinum	1010.30	1013.55	1019.55	1022.80	1028.80	1032.05	1038.05
Palladium	2317.00	2319.00	2320.75	2322.75	2324.50	2326.50	2328.25

Pivot Points (Weekly)

Name	S3	S2	S1	Pivot	R1	R2	R3
Gold	1764.00	1794.40	1819.00	1849.40	1874.00	1904.40	1929.00
Silver	22.09	22.86	23.47	24.24	24.86	25.63	26.24
Platinum	905.04	951.72	984.49	1031.17	1063.94	1110.62	1143.39
Palladium	2140.91	2199.33	2257.91	2316.33	2374.91	2433.33	2491.91