Gold Price Forecast: Corrective decline complete? 20-SMA at $1,815 may hold the key

XAU/USD Current price: $1,816.83

  • Wall Street struggles to post gains as risk appetite fades.
  • US Treasury yields advanced at the beginning of the day but trimmed most gains.
  • XAU/USD edged lower as the greenback corrects overbought conditions.

Spot gold holds near its recent highs, although lacking follow-through. The bright metal trades around $1,817 a troy ounce, marginally lower for the day after peaking at $1,828.07 on Wednesday. The markets’ appetite for risk witnessed in the previous sessions somehow faded, with stocks struggling to post gains and government bond yields ticking higher.

US Treasury yields are up, although without fireworks. The yield on the 10-year note stands at around 1.72%, bouncing from Wednesday’s low of 1.71% but below an intraday peak of 1.761%. The dollar’s corrective advance, however, may soon be over, as gold bounced quickly from an intraday low of 1,812.28.

Gold price short-term technical outlook

The  XAU/USD pair has trimmed its previous daily gains, although the daily chart shows that the metal is holding above all of its moving averages, with the 20 SMA heading north above the longer ones. Technical indicators have turned lower but remain within positive levels.

In the near term, and according to the 4-hour chart, the decline seems corrective. The metal is still above a bullish 20 SMA, which provides dynamic support at around 1,815. Meanwhile, technical indicators have stabilized within positive levels after correcting overbought conditions. Renewed selling interest below the intraday low could end up with a bearish extension sub-1,800.

Support levels: 1.812.30 1,805.00 1,797.70

Resistance levels: 1,820.75 1,829.60 1,842.85  

View Live Chart for the XAU/USD

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