Gold Price Forecast: XAU/USD clings to 100-DMA ahead of US data


  • Gold struggles to extend the previous day’s rebound despite recently picking up bids.
  • Market sentiment improves as policymakers placate Omicron fears, US stimulus chatters also add to the risk-on mood.
  • US data eyed as bearish formation hints at seller’s return. 
  • Powell sent gold above $1,800: But only for a short while

Update: Gold price is flatlined so far this Wednesday’s Asian trading, hovering around the 100-Daily Moving Average (DMA). The bright metal lacks a clear directional bias, in absence of fresh catalysts, as attention now turns towards the US CB Consumer Confidence data for fresh impetus. The persistent concerns over the Omicron covid variant flareups in Europe, Australia and the UK continue to play out amid holiday-thinned market conditions. Technically, gold price remains capped between key DMAs, with the 14-day Relative Strength Index (RSI) still hovering at 50.00, indicating incisiveness amongst gold traders.

Read: Are commodities fading the global economic recovery?

Gold (XAU/USD) stays mildly bid around $1,790, up for the second consecutive day during Wednesday’s Asian session. Even so, the metal fails to track other risk barometers, like Antipodeans and WTI, to portray risk-on mood. The reason could be linked to the market’s cautious sentiment ahead of a slew of the US data as well as a bearish chart pattern.

Global policymakers’ rejections of the major lockdown measures ahead of the Christmas holidays, despite the latest spread of the South African covid variant, dubbed as the Omicron, seemed to have favored the sentiment. Also positive for gold were US President Joe Biden’s expectations of getting the “Build Back Better (BBB)” plan done as well as vaccine/treatment optimism.

Even as Texas reported the first Omicron-linked death in the US, President Joe Biden refrained from any national lockdowns, as already revealed, while also pushing for faster vaccinations. On the same line were cautious optimism emanating from Pacific nations and the UK. Furthermore, news that the US Food and Drug Administration (FDA) is up for authorizing a pair of pills from Pfizer and Merck to treat Covid-19 as soon as this week, per Bloomberg’s sources, also underpinned the risk-on mood.

Additionally, “President Biden on Tuesday said he thinks there is still a possibility that his Build Back Better agenda can get done, despite Sen. Joe Manchin’s opposition of the climate and social spending bill,” said The Hill.

On the contrary, a recovery in the US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, ahead of the key US data set for this week challenges the gold buyers. Furthermore, the Sino-American and the US-Russia tussles add to the bearish bias for gold prices.

That said, the US Treasury yields rose 4.8 basis points (bps) to 1.467% whereas the Wall Street benchmarks snapped a three-day downtrend by the end of Tuesday’s North American session. The S&P 500 Futures, however, drops 0.10% intraday by the press time.

Moving on, gold traders may reassess the latest market optimism despite the Omicron woes and firmer inflation expectations ahead of the US data.

Read: Conference Board Consumer Confidence December Preview: Where do Americans turn for optimism?

Technical analysis

Gold portrays a hidden bearish divergence pattern following its break of an ascending trend line from late September. Adding to the bearish bias is the failure to cross the 200-SMA and the downbeat MACD signals.

A hidden bearish divergence can be identified when the prices make lower high but the oscillator, here the RSI, makes higher high.

That said, the pullback moves can initially eye 61.8% Fibonacci retracement (Fibo.) level of September-November advances, near $1,781, a break of which will direct gold bears to 78.6% Fibo. surrounding $1,754.

In a case where gold prices remain weak past $1,754, the $1,745 and $1,733 may act as intermediate halts before highlighting September’s low of $1,721.

Meanwhile, recovery moves remain elusive below the support-turned-resistance line near $1,814. It’s worth noting that the 200-SMA level of $1,808 acts as an immediate upside barrier.

Following that, November 09 swing high around $1,833 and $1,845-50 region can challenge gold buyers ahead of favoring the run-up to the last month’s peak of $1,877.

Gold: Four-hour chart

Trend: Pullback expected

Additional important levels

Overview
Today last price 1789.7
Today Daily Change 1.16
Today Daily Change % 0.06%
Today daily open 1788.54
 
Trends
Daily SMA20 1783.44
Daily SMA50 1798.97
Daily SMA100 1788.67
Daily SMA200 1795.32
 
Levels
Previous Daily High 1804.2
Previous Daily Low 1788.43
Previous Weekly High 1814.33
Previous Weekly Low 1753.01
Previous Monthly High 1877.23
Previous Monthly Low 1758.92
Daily Fibonacci 38.2% 1794.45
Daily Fibonacci 61.8% 1798.18
Daily Pivot Point S1 1783.25
Daily Pivot Point S2 1777.95
Daily Pivot Point S3 1767.48
Daily Pivot Point R1 1799.02
Daily Pivot Point R2 1809.49
Daily Pivot Point R3 1814.79

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD treads water just above 1.0400 post-US data

EUR/USD treads water just above 1.0400 post-US data

Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.

EUR/USD News
GBP/USD remains depressed near 1.2520 on stronger Dollar

GBP/USD remains depressed near 1.2520 on stronger Dollar

Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.

GBP/USD News
Gold keeps the bid bias unchanged near $2,700

Gold keeps the bid bias unchanged near $2,700

Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.

Gold News
Geopolitics back on the radar

Geopolitics back on the radar

Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.

Read more
Eurozone PMI sounds the alarm about growth once more

Eurozone PMI sounds the alarm about growth once more

The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures