Gold Price Forecast: Bulls defending the $1,800 threshold

Valeria Bednarik FXStreet

XAUUSD Current price: $1,814.53

Softer-than-expected Chinese data and the Ukraine war weighed on the market’s mood.
Global indexes are under pressure, although Wall Street managed to trim most losses.
XAUUSD has bounced from a fresh multi-month low of $1,786.70 but lacks follow-through.

Spot gold started the day on the back foot, falling to $1,786.69 a troy ounce, its lowest since last January. Poor Chinese data reminded speculative interest of the fragile global economic situation and pushed the greenback higher against most major rivals. The dismal sentiment faded during the European session, although most local indexes closed in the red. At the time of writing, Wall Street has trimmed pre-open losses, but none of the three major indexes has made it into the green.

The American dollar eased, but the sentiment remains sour. US government bond yields are down for the day amid demand for safe-haven bonds, with the yield on the 10-year Treasury note at 2.86%.

Elsewhere, increasing coronavirus infections, mainly in Asia but spreading in Europe, are another cause of concern. Tensions also mounted between Russia and the western world, as Finland and Sweden confirmed they would apply to join NATO, with Moscow stating that such a move would not improve the security situation of Europe.

Gold Price short-term technical outlook

XAUUSD is marginally higher on a daily basis, but the risk remains skewed to the downside. The bright metal keeps developing below all of its moving averages, with the 200 SMA providing dynamic resistance at around $1,836.00. Technical indicators, in the meantime, continue to consolidate near oversold readings.

The 4-hour chart shows that the pair is developing below firmly bearish moving averages, while technical indicators are correcting oversold conditions but still within negative levels. Overall, the advance seems corrective, with renewed selling interest below the $1,800 figure opening the door for a steeper decline towards a fresh year low below $1,780.

Support levels: 1,799.05 1,786.70 1,777.10

Resistance levels: 1,817.60 1,836.00 1,850.20

View Live Chart for the XAU/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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