The price of gold is once again consolidating within the boundaries of a massive range, entailing excellent opportunities for the implementation of range-trading strategies. Those involve picking the tops and bottoms within the established range.
The consolidation is due to a mixture of conflicting news and statistics, making it impossible for neither bulls nor bears to retain control for long. On the one hand, stymied global demand and subdued economic sentiment remain a major source of concern for the tentative global recovery. Such hit and miss economic developments have prompted heightened demand for lower-risk securities by investors seeking to protect their portfolios.
On the other hand, the spread of the new Omicron variant has not bolstered this demand quite as much as was initially feared, at least not for the time being. That is why gold is not rallying at present. Not only that, but higher-risk assets seem to be recovering in the short term, which is exerting extra bearish pressure on gold.
The market has already priced in the much weaker-than-expected November payrolls, which is why we are not seeing extra buying pressure currently. It is the November inflation numbers, which are scheduled for publication on Friday, that the market is currently turning its attention to.
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