Gold Price Forecast: Upside bias remains intact amid bullish technical setup
- Gold bulls continue to target $1800 amid renewed DXY sell-off.
- Bullish 1D technical setup to overshadow the impact of stabilizing yields.
- News on Biden’s tax proposal, US PMIs and covid updates in focus.
Gold (XAU/USD) sellers returned on Thursday and downed the prices by 1% to $1777 levels. Gold snapped a two-day winning streak and fell from near the $1798 region after reports that US President Joe Biden is proposing a capital gains tax hike for the wealthy to fund its social pan, which triggered risk aversion across the board. Investors scurried to safety in the US dollar as the US stocks tumbled alongside the Treasury yields, weighing on the USD-sensitive gold. However, the surging covid cases globally and the fall in the US rates helped put a floor under the yellow metal.
Heading into the final trading day of this week, gold has turned positive once again, looking to retake the $1800 mark, as the greenback has resumed its bearish momentum amid improving market mood, as investors appear to move past Biden’s tax hike reports. The US Treasury yields are stabilizing after the previous drop, although its impact on the yieldless gold is likely to be limited, as the technical setup remains in favor of the bulls. Markets also look forward to the Eurozone and US PMI reports from fresh hints on the post-pandemic global economic recovery. Meanwhile, the covid vaccines and infections updated will be closely eyed as well.
Gold Price Chart - Technical outlook
Gold: Daily chart
Gold’s daily chart shows a touch of green in Friday’s trading so far, as the quest for the $1800 mark continues.
The XAU buyers remain hopeful amid an impending bull cross and the 14-day Relative Strength Index (RSI) still holding firmer above the midline.
The 21-daily moving average (DMA) is on the verge of piercing through the 50-DMA from below, which would confirm a bullish crossover and hint at a potential move higher.
A daily closing above the $1800 threshold is needed to revive the double bottom bullish reversal.
The 100-DMA at $1804 would be the next bullish target, above which the doors are likely to open up towards the February 24 high of $1814.
Alternatively, a drop below Thursday’s low of $1777 is likely to put this week’s low at $1764 at risk.
Further down, the confluence of the 21 and 50-DMAs at $1747 is the level to beat for the XAU bears.
Premium
You have reached your limit of 3 free articles for this month.
Start your subscription and get access to all our original articles.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
