Gold Price News and Forecast: XAU/USD charts a narrowing price range near the 200-day SMA

FXStreet Team FXStreet

Gold Price Analysis: XAU/USD needs to crack key $1858 barrier for further upside – Confluence Detector

After four straight down sessions, Gold (XAU/USD) looks to extend its recovery above $1850, benefiting from growing covid concerns globally and expectations of additional US fiscal stimulus.

President-elect Joe Biden is expected to propose a multitrillion-dollar stimulus package on Thursday, reviving the reflation trades, which could set an inflation uptrend. Gold, therefore, draws support as an inflation-hedge.

Gold Price Analysis: XAU/USD charts a narrowing price range near the 200-day SMA

Gold is trading largely unchanged on the day near $1,845 per ounce. The sellers failed to establish a foothold below the 200-day Simple Moving Average (SMA) for the second straight trading day on Monday. The average is currently located at $1,838.

The yellow metal has carved out a pennant pattern on the hourly chart. A downside break would imply a continuation of the sell-off from $1,940 and open the doors to a re-test of Monday's low of $1,816. A violation there would expose the psychological level of $1,800.

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