- Gold slides down some 0.25% amid an improved market sentiment during the day.
- The Federal Reserve’s recent hawkish tone impacted the prospects of the non-yielding metal, as US T-bond yields rise, on hiking rates expectations.
- XAU/USD Price Forecast: In the near term is tilted to the upside, though a break of $1,800, could open the door to $1,834.
Gold (XAU/USD) edges lower during the New York session, trading at $1,779, down some 0.25 %, at the time of writing. The market sentiment is positive due to good news regarding the omicron variant; even though it is highly transmissible, cases are mild, thus hurting safe-haven non-yielding assets, like precious metals.
Additionally, the sudden shift of the Federal Reserve led by Chair Jerome Powell, who said that inflation is no longer “transitory” and favoring a fast bond-taper, boosted the greenback. That alongside higher US T-bond yields with the 10-year benchmark note rate rising almost ten basis points, up to 1.436%, lifts the US dollar against the yellow-metal.
During the day, XAU/USD recovered some of Friday’s losses. However, it has failed to break above the high of the previous-mentioned day at $1,786, which confluences with the 200-hour simple moving average (HSMA), which acted as dynamic resistance, sending gold sliding towards $1,777. Nevertheless, upside risks are mounting lately, as the non-yielding metal broke the 50 and the 100-HSMA, as gold bulls threaten to re-test the $1,800 figure.
XAU/USD Price Forecast: Technical outlook
In the last hour, gold seesawed around the $1,779-87 area, which coincided with the 100 and the 200-hour simple moving averages (HSMA’s), respectively. It looks like this consolidation phase could break to the upside, even though the 200-HSMA is above the spot price, but it is worth noting that XAU/USD broke above the 50 and the 100-HSMA in the last couple of hours.
In the outcome of breaking above the range, the first resistance would be the Monday R1 daily pivot at $1,792. A breach of the latter would expose $1,800, but it will find on its way up, the R2 daily pivot at $1,798.60
On the flip side, a break below the bottom of the range would expose the S1 daily pivot at $1,771, followed by the December 3 swing low at $1,766 and then the December 2 low at $1,762.