Gold Price Forecast: XAU/USD steady around $1800 as US T-bond yields drop

Gold (XAU/USD) advances for the third successive day, aiming towards ending the week on a higher note, trading around $1,805 during the New York session. At the time of writing, the market sentiment is downbeat, as shown by US equity indices posting losses between 0.22% and 1.18%. Meanwhile, US bond yields extend their fall, with the 10-year benchmark note falling three basis points, down to 1.392%, a tailwind for the non-yielding metal.

After the bulk of central banks hosting monetary policy decisions, the yellow metal finally broke the $1,800 barrier, as investors assess the “hawkish” pivot in the Fed, the Bank of England (BoE), and the European Central Bank (ECB). 

An absent macroeconomic US docket would keep XAU/USD trading within familiar levels. The “hawkish” pivot by Jerome Powell did its work as Fedspeakers cross the wires. 

In the last couple of hours, Fed’s Governor Christopher Waller said that the US economy is “closing in” on maximum employment and backed the Fed’s decision to accelerate the pace of the QE taper. He noted that inflation “is alarmingly high, persistent and has broadened.”

At the same time, San Francisco’s Federal Reserve President Mary Daily said that it expects unemployment to fall below 4% in 2022, adding that she is bullish on the US economy. Regarding elevated prices, Daly said that “persistence in above-2% inflation is a positive outcome,” as it helps achieve the central’s bank target. Furthermore, she added that she foresees 2-3 rate hikes, but it would depend on how the US economy evolves.

Apart from this, investors’ focus is on the US macroeconomic docket next week. On Wednesday, US GDP (Q3), Consumer Confidence (December), and Personal Consumption Expenditures Prices (PCE) for the Q3 would entertain participants. On Thursday, Durable Goods (Nov),  Initial Jobless Claims (Dec. 17), New Home Sales (Nov), and Michigan Consumer Sentiment (Dec) would offer additional clues on the status of the US economy.

XAU/USD Price Forecast: Technical outlook

Gold (XAU/USD) has a neutral bias, despite trading above the daily moving averages (DMAs). However, once reclaimed the $1792.95 price level, that might open the door for further upside, though there would be some strong resistance levels to face. The first resistance would be November 26 swing high at $1,815.37. A breach of the latter would expose the September 3 high at $1,834, followed by the November 16 pivot high at $1,877.

On the flip side, supports would be found around the DMAs. The first would be the 50-DMA at $1,797.85, then the 200-DMA at $1,794.52, and the 100-DMA at $1,788.35.

.