Gold Price Forecast: XAU/USD eases towards $1,780 on resurgent USD demand


Update: Gold price is moving back and forth in a familiar range below $1,790, unable to hold onto the upside amid a broad rebound in the US dollar. The mixed market sentiment is pushing the investors to find safety and certainty in the US dollar even as the Treasury yields fade their recovery momentum.

Traders refrain from placing any directional bet in the bright metal ahead of the all-important US inflation data due this Friday. The latest reports that the ECB could likely boosts its Asset Purchase Programme (APP) next week failed to lift the sentiment around the non-yielding gold.

Read: Gold Price Forecast: XAU/USD traders seem non-committed below 200/100-DMA, US CPI awaited

Gold (XAU/USD) remains steady at around $1,785, recently easing from intraday top heading into Thursday’s European session.

The yellow metal portrayed a bearish candlestick the previous day amid mixed concerns over the South African covid variant and its cure. However, the latest challenges to the market sentiment underpin the US dollar and lure the gold sellers ahead of the all-important US Consumer Price Index (CPI) data, up for publishing on Friday.

News that leading covid vaccines’ booster shots are effective against Omicron joined studies that the virus variant is less detrimental than the previous versions to favor previous risk-on mood. However, fresh virus-led lockdowns in Germany, France and the UK join the latest study from Japan saying four-time more transmissibility of the South Africa-linked COVID-19 strain to weigh on the sentiment.

Elsewhere, US-China tussles got escalated on the Taiwan issue, following the previous tension over Beijing Olympics, which in turn weighed on the sentiment and the gold prices. Adding to the China-linked challenges for risk appetite were fears of Evergrande and Kaisa defaults. On the same line were the US-Russia tussles over Ukraine and Washington-Israel talks concerning Tehran.

While the risk-off mood favors US 10-year Treasury yields and the US Dollar Index (DXY) to stay positive, a four-day rebound of the US inflation expectations propels market chatters over the Fed rate hike and fuels bond coupons as well as DXY, also weighing on the gold.

It should be noted, however, that the market’s wait for Friday’s US CPI and more clues over Omicron keeps the gold prices steady below the key hurdle.

Technical analysis

Despite bouncing off a seven-week-old horizontal area, gold stays beneath the 200-DMA, not to forget mentioning the previous support line from late September. The metal’s failures to cross short-term key hurdles join bearish MACD signals and Wednesday’s Doji candlestick to keep sellers hopeful.

That said, the 61.8% Fibonacci retracement (Fibo.) of September-November upside, near $1,780, precedes the $1,772 level to restrict short-term declines of gold prices.

Following that, multiple levels marked since October 18 challenge gold bears around $1,760-62.

On the flip side, the 200-DMA and the support-turned-resistance line, respectively around $1,792 and $1,798, join the 50.0% Fibo. level surrounding $1,800 to question the gold buyers.

During the quote’s sustained run-up past $1,800, the $1,815 and $1,845 levels may offer intermediate halts before directing gold prices towards November’s peak of $1,877.

Gold: Daily chart

Trend: Pullback expected

Additional important levels

Overview
Today last price 1785.62
Today Daily Change 0.00
Today Daily Change % 0.00%
Today daily open 1785.62
 
Trends
Daily SMA20 1810.62
Daily SMA50 1794.95
Daily SMA100 1790.57
Daily SMA200 1792.33
 
Levels
Previous Daily High 1793.17
Previous Daily Low 1779.69
Previous Weekly High 1808.78
Previous Weekly Low 1761.99
Previous Monthly High 1877.23
Previous Monthly Low 1758.92
Daily Fibonacci 38.2% 1788.02
Daily Fibonacci 61.8% 1784.84
Daily Pivot Point S1 1779.15
Daily Pivot Point S2 1772.68
Daily Pivot Point S3 1765.67
Daily Pivot Point R1 1792.63
Daily Pivot Point R2 1799.64
Daily Pivot Point R3 1806.11

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD struggles to rebound, holds near 1.1150 after US data

EUR/USD trades around 1.1150 in the early American session on Friday as investors assess the latest inflation data from the US. According to the US Bureau of Economic Analysis, Core PCE Price Index rose to 4.9% on a yearly basis in December from 4.7% in November, surpassing the market expectation of 4.8%. 

EUR/USD News

GBP/USD clings to small gains above 1.3400 on mixed US data

GBP/USD posts modest daily gains slightly above 1.3400 on Friday as the dollar rally loses steam. The data from the US showed that the core PCE inflation edged higher to 4.9% in December. On a negative note, Personal Spending contracted by 0.6% on a monthly basis.

GBP/USD News

Gold recovers modestly after US data, stays below $1,800

Gold managed to stage a rebound from the multi-week low it set below $1,780 but continues to trade deep in the red near $1,790. The benchmark 10-year US Treasury bond yield is rising more than 1% on the day after US data, limiting XAU/USD's recovery.

Gold News

Bitcoin Weekly Forecast: Federal Reserve cannot tame BTC’s uptrend

Bitcoin has experienced some significant losses over the past few weeks, with a more dramatic drop occurring this week after the Fed's decision was announced. As losses have extended and BTC has entered into the $30,000 zone, concerns regarding Bitcoin being in a bear market have increased.

Read more

Apple share price set to rise after another record quarter

With the Nasdaq closing at its lowest level in seven months yesterday, the Apple share price has also found itself on the end of the recent weakness in tech shares, down over 12% from its record highs in early January.

Read more

Forex MAJORS

Cryptocurrencies

Signatures