Gold Price Forecast: XAU/USD clings to mild gains above $1,800 as bulls brace for 2023

Gold price (XAU/USD) replicates the sluggish market conditions during early Friday, despite printing mild gains around the intraday high near $1,818 by the press time. The reason could be linked to the year-end holiday mood and a light calendar, as well as mixed headlines surrounding the recent key risk catalysts.

While portraying the mood, US 10-year Treasury yields fade the previous day’s pullback from the six-week high and take rounds to 3.8% whereas the S&P 500 Futures print mild losses around 3,865 despite Wall Street’s positive closing.

Talking about the key catalysts, pessimism surrounding China’s Covid conditions and the Ukraine-Russia tussles joining the global recession woes to weigh on the sentiment. Alternatively, the hopes of the peak in the virus numbers in China and the discovery of an anti-Covid pill joins the chatters of no economic slowdown in the US and Europe to keep the markets positive. Also likely to defend the optimists is the US government funding bill worth $1.7 trillion for the fiscal year 2023.

Alternatively, the UK-based health data firm Airfinity said on Thursday that around 9,000 people in China are probably dying each day from COVID-19, double the numbers expected the previous day and higher than the official figures conveyed by China. It’s worth noting that seven counties including the US, the UK and Japan have already announced Covid-test requirements for travelers from China. Elsewhere, the US funding bill suggesting more weapon support for Ukraine also weighs on the sentiment.

It should be observed that the mixed prints of the second-tier US data allowed the US Dollar bears to keep the reins amid inactive markets.

Moving on, a virtual meeting between China President Xi Jinping and Russian counterpart Vladimir Putin will be important to watch for Gold traders. On the same line, the US Chicago Purchasing Managers’ Index for December, expected 41.2 versus 37.2 prior, will decorate the calendar. Following that, Saturday’s official readings of China Manufacturing and Non-Manufacturing PMIs for the current month should be eyed for one last shot at the markets in 2022.

For 2023, the hopes of easy rates and a likely economic recovery could keep the Gold buyers on the desk despite the latest challenges to the sentiment.

Gold price technical analysis

Gold price flirts with a three-day-old resistance line as bulls take a breather amid nearly overbought RSI (14) and sluggish MACD signals.

However, higher lows on prices gain support from the higher bottoms of the RSI and hence the latest upside momentum appears valid. Also keeping the Gold buyers hopeful is the metal’s successful trading above the 200-HMA.

As a result, the yellow metal is well-set for crossing the immediate trend line hurdle, surrounding $1,818, while targeting the multiple hurdles near $1,825 and the monthly peak of $1,834. It’s worth noting that the bullion’s successful trading beyond $1,834 won’t hesitate to challenge June’s peak near $1,880.

On the other hand, pullback moves need validation from the 200-HMA support of $1,805, as well as the $1,800 threshold, to convince Gold sellers.

Even so, a two-week-old ascending support line, around $1,795 by the press time, could challenge the XAU/USD bears.

Gold price: Hourly chart

Trend: Further upside expected