Gold Price Forecast: Still depressed despite the better market mood

Valeria Bednarik FXStreet

XAU/USD Current price: $1,782.71

The market’s mood has improved, helping gold to trim most of its weekly losses.
Stocks trade in the green while US Treasury yields ticked marginally higher.
XAU/USD maintains its bearish stance in the near term could test November low.

Gold recovered on Wednesday alongside the market’s mood, currently trading in the $1,780 region. The bright metal advanced on easing demand for the American currency, as stocks turned green following Tuesday’s setback. The absence of first-tier events and relief news related to the coronavirus Omicron variant underpinned the sentiment. According to the World Health Organization, the current vaccines may protect from severe illness. Also, the WHO reported that so far, the new strain seems to be causing milder symptoms and illness. Caution around the issue is still high as a clear picture may come after a couple more weeks.

Meanwhile, government bond yields held ground, with the 10-year Treasury note yielding 1.47% at the time being. US Federal Reserve Chair Jerome Powell is giving his testimony about the CARES act before a different Senate Commission, repeating his Tuesday’s words.

Gold price short-term technical outlook

XAU/USD retains its bearish stance according to the daily chart. Sellers reject the advance once again around directionless and converging 100 and 200 SMAs, while technical indicators hold near their recent lows within negative levels, although losing their bearish strength.

The 4-hour chart shows that gold is at risk of falling. The metal remains below a mildly bearish 20 SMA, which remains below the longer ones, as technical indicators stand directionless below their midlines. The main support and possible bearish target is $1,758.81, November monthly low.

Support levels: 1,771.80 1,758.80 1,745.20

Resistance levels: 1,796.00 1,803.85 1,815.53

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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