Gold Price Forecast: Bulls maintain the pressure as inflation concerns are back

XAU/USD Current price:  $1,781.01

  • The American dollar attracts buyers as US government bond yields appreciate.
  • Stocks are on the back-foot after flirting with all-time highs on Wednesday.
  • XAU/USD needs to clear 1,790.60 to become attractive for bulls.

Gold trades at around $1,781.00 a troy ounce, flat on a daily basis. However, the bright metal has posted a higher high and a higher low for a fourth consecutive day, a sign that buyers are still interested in the safe-haven asset. Nevertheless, the American dollar is trading with a firmer tone in the current session, helped by persistent strength in government bond yields. The yield on the 10-year Treasury note has peaked at 1.682%, a fresh multi-month high, and currently stands at around 1.67%, reviving inflation-related concerns.

Meanwhile, stocks are on the back-foot. US indexes trade in the red, retreating from near record highs, as Asian and European counterparts closed in the red. A sharp decline in oil prices adds to the sour sentiment, with the commodity weighed by the forecast for a warm winter in the US, taking off some pressure from the supply side. Gold is currently trapped between mild-dollar demand and the need for safety.

Gold price short-term technical outlook

XAU/USD is neutral-to-bullish in its daily chart, as it keeps trading above a mildly bullish 20 SMA but below the 100 and 200 SMAs, both converging and heading lower. Technical indicators are directionless, although within positive levels, skewing the risk to the upside.

The 4-hour chart for gold offers a similar technical stance, as indicators have turned flat around their midlines, although a bullish 20 SMA provides intraday support. Gold has spent the day hovering around a Fibonacci level, the 23.6% retracement of its latest daily advance, after bouncing from the 50% retracement earlier during this week. At this point, XAU/USD would need to clear the 1,790.60 resistance level to become more attractive for bulls.

Support levels: 1,7770.40 1,761.00  1,749.20

Resistance levels: 1,790.60 1,800.60 1,808.60

View Live Chart for the XAU/USD

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