Gold Steady Near $1,840 – Quick Daily Outlook

Gold prices closed at $1,839.80, after setting a high of $1,848.45, and a low of $1,836.40. Gold extended its gains towards $1,850, but it faced resistance and was pushed back because of the rising price of the US dollar. The US Dollar Index, which measures the value of the greenback against a basket of six major currencies, reversed its course on Thursday and recovered all of its previous daily losses.

The DXY hovered around 95.79 during the session, and capped further upside momentum in gold prices, whereas the US Treasury Yield, on a benchmark 10-year note, continued declining for the second consecutive session, and reached 1.81%, giving strength to the precious metal.At 18:30 GMT, the Philly Fed Manufacturing Index came in, showing a surge to 23.2, against the forecast of 18.9, supporting the US dollar on the data front. The Unemployment Claims from last week also rose to 286K, against the anticipated 227K and weighed on the US dollar. At 20:00 GMT, the Existing Home Sales figure were released, They declined to 6.18M, against the predicted 6.42M, weighing on the US dollar. Most data from the US was unfavorable, which added further to the gains in gold prices on Thursday.

Gold touched its two-month high on Thursday, amid the rising tensions surrounding the Russia-Ukraine issue and inflation. Some analysts believe that the increased level of inflation all over the globe has been pushing gold higher, as it has raised its appeal as a hedge against rising prices.

On the other hand, the safe-haven yellow metal also gathered strength from increased geopolitical tensions between Russia and Ukraine. Russia has built up massive troops on its borders with Ukraine, which the White House and European countries fear is planning a new assault. On Thursday, these uncertainties related to geopolitical tensions and high inflation kept gold higher.

However, the yellow metal started losing all of its daily gains during the late trading hours of Thursday’s session, as the potential hike in interest rates is the major event in the eyes of investors at the moment. The US Federal Reserve has shown its intention to tighten monetary policy faster than expected, and market participants are looking for clear hints about their decision, which could be delivered next week, in the policy meeting on 25 and 26 January. As a result, gold lost its gains, as rising interest rates translate into a higher opportunity cost of holding non-yielding bullion.

Furthermore, another reason behind the subdued gains in gold prices on Thursday could be the reaction of various nations towards the Omicron variant. As the new variant is considered…