XAU/USD Current price: $1,777.21
- Concerns about the Omicron variant maintain markets in risk-off mode.
- The ECB and the US Fed will likely announce opposed monetary policy decisions next week.
- XAU/USD trades at the lower end of its recent range lacking directional momentum.
Spot gold edged lower for a second consecutive day, trading at around $1,776, after bottoming at $1,773.72 a troy ounce. The bright metal keeps trading within familiar levels under the critical $1,800 threshold, unable to attract investors in risk-off scenarios. The market’s mood remained depressed on Thursday, as concerns related to the coronavirus Omicron variant keeps spooking speculative interest. There have been encouraging reports about the strain’s aggressiveness, alongside discouraging ones related to its virulence. Still, it’s all speculation at this point.
Demand for government bonds dragged yields lower, reflecting the sour sentiment, while global stocks traded mostly in the red. Also, the US Federal Reserve and the European Central Bank will announce their monetary policy decisions next week. And while the Fed is expected to speed up tapering, the ECB is suspected of expanding its pandemic-related financial support program. Investors will likely remain cautious ahead of the decisions.
Gold price short-term technical outlook
XAU/USD offers a neutral-to-bearish stance in its daily chart and has room to extend its slump, although it lacks the strength to do it. Nevertheless, sellers continue defending the upside at around 1,793.00, where the 100 and 200 SMAs converge. At the same time, technical indicators remain directionless within negative levels.
The near-term picture also shows that the risk is skewed to the downside but fails to indicate directional momentum. In the 4-hour chart, gold has extended its decline below its 20 SMA after multiple failed attempts to run beyond it. In the meantime, technical indicators turned flat below their midlines. Gold can accelerate its slump once below 1,772.05, the immediate support level.
Support levels: 1,772.05 1,758.80 1,745.20
Resistance levels: 1,793.00 1,803.85 1,810.65
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