Gold Price Forecast: Optimism weighs on the greenback, December high at sight
XAU/USD Current price: $1,811.69
- US government bond yields ease as stocks rally following a long weekend.
- Omicron-related news provide a base for optimism despite record contagions.
- XAU/USD trades near its December high at 1,814.23, the immediate resistance level.
Gold trades at fresh one-week highs amid a better market mood putting pressure on the greenback. The American currency eases against most major rivals as Wall Street heads firmly north following the long Christmas weekend. Investors cheer news related to the coronavirus Omicron variant, as South African and UK health experts suggested that people with this strain is between 50% and 70% less likely to need hospitalization than those with Delta.
Still, there’s a lot of uncertainty over the developments of the pandemic. Countries in the northern hemisphere are reporting record cases on a daily basis, and thousands of flights are being cancelled due to the number of people isolated. Health systems are suffering from a similar situation, with doctors and nurses off duty.
Meanwhile, US government bond yields are down, reflecting the better market’s mood. The yield on the 10-year Treasury note is down to 1.47% after flirting with 1.50% ahead of the opening.
Gold price short-term technical outlook
The XAU/USD pair trades around $1,811, maintaining its bullish tone in the daily chart, although lacking momentum. The bright metal is developing above all of its moving averages, which are anyway directionless. At the same time, technical indicators hold flat within positive levels.
In the near term, and according to the 4-hour chart, the technical picture is quite alike. Gold is trading above its 200 SMA, where it has been these last few sessions, but without follow-through. The 20 SMA heads higher below it, while technical indicators remain within positive levels, although without directional strength. The immediate resistance is 1,814.23, the high set on December 17, with a break above it probably spurring a stronger advance.
Support levels: 1,803.00 1,791.80 1,782.10
Resistance levels: 1,814.20 1,822.90 1,832.75
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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.
