Gold Price Forecast: Bulls looking for a re-test of November high at 1,877.15

Valeria Bednarik FXStreet

XAU/USD Current price: $1,841.90

US weekly unemployment claims unexpectedly jumped to 286K in the week ended January 7.
All eyes are on the US Federal Reserve monetary policy decision next week.
XAU/USD has room to extend its gains as long as it holds above $1,830.00 a troy ounce.

Gold resumed its advance after a short-lived consolidative stage, reaching a fresh two-month high of $1,847.92 a troy ounce. The dollar came under renewed selling pressure after the US released mixed economic figures. According to the official release, Initial Jobless Claims for the week ended January 7 unexpectedly jumped to 286K, much worse than the 220K expected. Like most major developed economies, US workers and businesses are struggling with Omicron-related disruptions. On the other hand, the Philadelphia Fed Manufacturing Survey surged from 15.4 to 23.2 in January, beating expectations.

The US Federal Reserve relies on what it calls “the jobs market at close to full employment,” to accelerate an aggressive reduction of its financial support to tame inflation. The unexpected increase in unemployment claims may be just a one-off, but if it keeps rising, the Fed may have to put a break.

Gold price short-term technical outlook

The XAU/USD pair trades flat for the day at around 1,840. The daily chart shows that the metal holds above all of its moving averages, with the 20 SMA advancing above the longer ones. Technical indicators, however, lack directional strength, the Momentum around its midline and the RSI at 61.

In the near term, and according to the 4-hour chart, the risk remains skewed to the upside. The pair is consolidating well above all of its moving averages, while technical indicators hold near overbought readings, with the Momentum maintaining its bullish slope but the RSI retreating modestly. As long as the pair remains above the 1,830 price zone, bulls will retain control, with scope for a retest of the November high at 1,877.15.

Support levels: 1,829.60 1,817.50 1,805.00

Resistance levels: 1,848.00 1,855.00, 1,866.90

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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