Gold Price Forecast: En route to challenge the November monthly low

Valeria Bednarik FXStreet

XAU/USD Current price: $1,783.43

Concerns related to the coronavirus Omicron strain keep investors in caution mode.
The market’s mood improved modestly during US trading hours, providing support to the USD.
XAU/USD is set to extend its decline in the near term and could reach $1,700.00.

Spot gold gapped lower at the weekly opening, as fear continued to dominate the financial boards. Concerns related to the new coronavirus variant named Omicron hit hard on the markets last Friday, although thinned conditions may have exacerbated the reaction to the news, as the US celebrated Thanksgiving on Thursday.

The market’s mood improved through the European session, with local and American indexes turning positive for the day and US Treasury yields ticking higher. Gold seesawed between gains and losses around $ 1,7885.36 a troy ounce, its opening level, currently a few cents below it.

Gold price short-term technical outlook

On a daily basis, XAU/USD posted a lower low and a lower high, skewing the risk to the downside. The mentioned time frame shows that gold keeps meeting sellers around directionless 100 and 200 SMAs, reflecting bears’ dominance. The Momentum indicator heads firmly lower at levels last seen in September, as the RSI indicator consolidates around 41.

In the near term, and according to the 4-hour chart, chances are of a bearish extension. Gold is trading below directionless moving averages, with the 20 SMA currently at around 1,792.50, as technical indicators head lower within negative levels. XAUUSD is poised to test its November low at 1,758.81, while below the latter the slide may continue towards the 1,700 figure.

Support levels: 1,771.95 1,758.80 1,745.20

Resistance levels: 1,796.00 1,803.85 1,817.75

View Live Chart for the XAU/USD

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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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