- Gold is flat during the New York session amid higher US T-bond yields.
- Appetite for riskier assets, dented investors interest in the precious metal, boost the greenback.
- XAU/USD Technical Outlook: Neutral-bearish, unless gold bulls reclaim $1,800.
Gold (XAU/USD) slides during the New York session, trading at $1,788 at the time of writing. Appetite for riskier assets spurred by vaccines helping tame the Omicron variant and the US FDA set to permit Pfizer, and Merck Covid-19 treatment pills boost the US dollar, to the detriment of the safe-haven gold.
In the meantime, the US Dollar Index, which measures the greenback’s value against a basket of six currencies, is barely down some 0.05%, clings to 96.50. Contrarily to that, US Treasury yields are rallying with the 10-year benchmark note rate at 1.487%, eight basis points higher than Monday’s session.
An absent US economic docket left the dynamics of the precious metal to market mood. However, on Wednesday, the US Gross Domestic Product release for the third quarter, alongside the Personal Consumption Expenditure prices (PCE), Fed’s favorite gauge of inflation, could generate movement in the XAU/USD.
In the overnight session, gold remained subdued in a narrow range, between $1,788-$1,795. As the European session began trended higher, stalling its upward move close to $1,800, confluence with the 50-hour simple moving average (SMA) retreating towards the 200-hour SMA at $1,786.32 amid a spike in US bond Treasuries. Furthermore, fell below the critical December 8 swing high at $1,792.95, opening the door for further losses that could push the yellow metal towards a re-test of $1,780.
XAU/USD Price Forecast: Technical outlook
The XAU/USD daily chart depicts indecision, as shown by the daily moving averages (DMAs) almost “horizontally” contained in the $1,787-$1,800 range. From a market structure perspective, unless gold bulls reclaim $1,792.95, the bias is bearish, though to resume the trend, USD bulls would need a daily close below the December 16 pivot low at $1,775.40.
On the way south, the first support would be the December 16 low at $1,775.40. A break beneath that level would exert downward pressure on the precious metal, exposing crucial support areas. The next one would be the December 2 low at $1,761.72, followed by the December 15 cycle low at $1,752.44
To the upside, the first resistance would be the December 8 cycle high at $1,792.95. A clear break of that level would immediately expose $1,800, followed by the September 3 swing high at $1,834.