Gold Price Forecast: Consolidative phase continues, 1,758.80 still at sight

XAU/USD Current price:  $1,784.07

  • US Treasury yields reached fresh weekly highs amid prevalent optimism.
  • Wall Street rallies on easing concerns related to the Omicron coronavirus variant.
  • XAU/USD could resume its decline once below 1,772.05 and test November low.

Spot gold seesaws within familiar levels, trading at the upper end of its latest range at around $1,786 a troy ounce, marginally higher for the day. The bright metal bottomed at $1,772.05, as the greenback appreciated ahead of Wall Street’s opening alongside US government bond yields. Optimism took over financial markers amid cooling concerns related to the Omicron coronavirus variant. Suspected to be more contagious but less aggressive, it seems the world will avoid lockdown that could lead to an economic setback.

As the US session develops, government bond yields retain gains, with the 10-year Treasury note yielding 1.44%. Meanwhile, stocks are firmly up, with the three major indexes posting substantial gains, somehow putting a cap on the dollar’s demand.

Gold price short-term technical outlook

XAU/USD posted a higher high and a higher low on a daily basis, but its bullish potential is well limited in the daily chart. It keeps developing below converging 100 and 200 SMAs at around 1,792, while the 20 SMA heads firmly lower above the longer ones. In the meantime, technical indicators are neutral-to-bearish within negative levels, reflecting the absence of buying interest.

The 4-hour chart shows that technical indicators are turning higher from around their midlines, although without enough strength to confirm a bullish continuation. A directionless 20 SMA provides mild intraday support, with a more relevant one at 1,772.05. Below the latter, gold has room to retest the November low at 1,758.80. Meanwhile, selling interest will likely surge on advances towards the 1,803/10 price zone.

Support levels: 1,772.05 1,758.80 1,745.20  

Resistance levels: 1,792.00 1,803.85 1,810.65

View Live Chart for the XAU/USD

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