Gold Price Forecast: Consolidating weekly gains amid broad dollar’s weakness

XAUUSD Current price: $1,659.29

• The dollar remains on the back foot despite a deteriorating market mood.
• US Treasury yields set the tone for financial markets in a risk-averse environment.
• XAUUSD is mildly bullish in the near term but still unable to break higher.

XAUUSD trades around $1,660, pressuring the weekly high. The bright metal fell to an intraday low of $1,641.46 a troy ounce but resumed its advance within US trading hours as investors keep moving away from the safe-haven currency. Nevertheless, the market´s mood is far from optimistic. Stocks trade in the red in the US, following their European counterparts' negative lead and trimming a good part of their Wednesday’s gains.

Meanwhile, US Treasury yields ticked higher at the beginning of the day, now holding on to modest gains, although far from their recent multi-year peaks. The 10-year note is currently yielding 3.75%, while the 2-year note offers 4.20%

The risk-averse background remains the same, but the dollar's extreme overbought conditions have come into play as investors try to assess the latest central banks’ developments.

Gold price short-term technical outlook

XAUUSD is bearish, according to the daily chart. Gold is trading around its opening price but below bearish moving averages. Technical indicators, in the meantime, offer modest bearish slopes within negative levels, reflecting the absence of substantial buying interest.

The chances are skewed to the upside, according to the 4-hour chart. Gold keeps trading above its 20 SMA, which slowly gains upward strength. At the same time, technical indicators maintain their bullish slopes within positive levels. Bulls could have a clearer path if the metal advances beyond $1,670.40, the immediate resistance level.

Support levels: 1,649.75 1,634.60 1,621.05

Resistance levels: 1,670.40 1,688.00 1,697.10

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