Gold Price Forecast: XAU/USD snaps two-day uptrend above $1,800 amid mixed sentiment
- Gold price extends pullback from six-month high, renews intraday low of late.
- Easing optimism surrounding China, fading recession woes in the US weigh on XAU/USD price.
- Holiday season, immediate support line challenges Gold’s downside but bulls need validation from $1,825.
Gold price (XAU/USD) remains pressured around $1,810 while snapping a two-day winning streak during the initial trading hour of Wednesday’s European session. In doing so, the yellow metal fails to justify the latest retreat in the US Treasury bond yields, as well as the US Dollar Index (DXY), amid the holiday season.
US Dollar Index (DXY) takes offers to reverse the early Asian session gains, as well as the previous day’s rebound, while refreshing the intraday low near 104.10. That said, the US 10-year Treasury yields take a U-turn from the six-week high, marked on Tuesday, while marking 2.3 basis points (bps) of decline to 3.83% by the press time.
The reason for Gold’s latest weakness could be linked to easing optimism surrounding China’s reopening as the US conveys dissatisfaction with the dragon nation’s virus numbers. As a result, the US is searching for a way to impose new COVID-19 measures on travelers to the United States from China.
On the other hand, a Researcher from the Federal Reserve Bank of San Francisco’s Economic Research Department ruled out odds favoring the US economic slowdown for at least the upcoming two quarters.
Amid these plays, the US stock futures print mild gains while equities in Europe and the UK remain mildly offered while tracing Asia-Pacific shares and Wall Street’s mixed closing.
To sum up, Gold portrays the market’s indecision while consolidating the recent gains.
Gold price technical analysis
A triple top around $1,825 and a pullback from the overbought RSI justify the latest declines in the Gold price.
However, a one-week-old ascending support line, around $1,805 by the press time, quickly followed by the 200-HMA level surrounding the $1,800 threshold, challenges the Gold bears.
In a case where Gold drops below the $1,800 round figure, a quick drop to the previous weekly low near $1,785 can’t be ruled out.
Alternatively, a successful break of the $1,825 hurdle will be enough for the Gold buyers to aim for June’s peak surrounding $1,880.
Overall, the Gold price slips to the bear’s radar after failing to keep buyers on the board. Though, the downside mood needs validation from the $1,800 mark.
Gold price: Hourly chart
Trend: Further downside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
