Gold Price Forecast: XAU/USD clings to mild gains above $1,800 on softer US Dollar, Treasury yields
|- Gold price clings to mild gains around weekly top.
- Mixed risk catalysts, BOJ actions probe US Dollar, bond yields.
- US data, qualitative factors to determine intraday XAU/USD moves.
- Holiday season, light calendar to restrict Gold price moves during the rest of 2022.
Gold price (XAU/USD) grinds higher at the intraday top near $1,820, reversing the previous day’s pullback from a one-week high, as markets sneak into a holiday mood during early Thursday. Also favoring the metal price could be the recent pullback in the US Dollar amid mixed catalysts and pre-data anxiety.
That said, the US Dollar Index (DXY) drops 0.36% intraday to around 103.85 by the press time while the US 10-year Treasury bond yields remain depressed near 3.65% after retreating from the monthly high of 3.72% the previous day.
China’s readiness for more stimulus and the Bank of Japan’s (BOJ) second unscheduled bond buying allow US stock futures to remain mildly bid, as well as let the US Treasury bond yields retreat, at the latest.
On the other hand, updates surrounding Russia and Ukraine weigh on the sentiment and put a floor under the US Dollar, due to its safe-haven demand. Ukrainian President Volodymyr Zelensky’s US visit and Russian President Vladimir Putin’s readiness to increase the country’s military potential.
On Wednesday, the DXY bounced off its weekly low the previous day as the US Conference Board’s (CB) Consumer Confidence jumped to the eight-month high of 108.3 for December, compared to the market forecasts of 101.0 and the revised prior readings of 101.40. However, the US Existing Home Sales for November, 4.09M MoM compared to 4.2M expected and 4.43M prior, probed the US Dollar bulls.
Against this backdrop, it becomes safe to conclude that the Gold price grinds higher and may end the year 2022 on a positive note. However, a light economic calendar during the final days of the year and mixed catalysts could restrict the metal’s moves during the holiday season.
Even so, final prints of the US Gross Domestic Product (GDP) and Core Personal Consumption Expenditure (PCE) details for the third quarter (Q3) could entertain the pair traders ahead of Friday’s US Core PCE Price Index for November, also known as the Fed’s preferred inflation gauge. That said, the US GDP is expected to confirm 2.9% Annualized growth in Q3 while the Core PCE is anticipated to also meet the initial forecasts of 4.6% QoQ during the stated period.
Gold price technical analysis
Gold price remains firmer around the double tops marked in the last week, near $1,825. It should be noted that the nearly overbought RSI (14) and receding bullish bias of the MACD challenges the buyers.
Hence, the metal’s further upside hinges on a clear break of the $1,825, which in turn could trigger a run-up targeting $1,875. Following that, June’s peak surrounding $1,880 could challenge the Gold buyers.
Alternatively, XAU/USD sellers remain off the table unless witnessing a clear downside break of the $1,790 support confluence, comprising 100-SMA and a one-month-old ascending trend line.
Also acting as the downside filter is the previous weekly low and the monthly bottom, respectively around $1,775 and $1,765.
Gold price: Four-hour chart
Trend: Further upside expected
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