Gold Price Forecast: XAU/USD hovers above the 200-hour SMA, at $1785

• Gold advances during the day, benefitted by US T-bond yields flat.
• Despite Fed’s recent hawkishness rhetoric, the non-yielding metal advances 0.45%. 
• XAU/USD Price Forecast: Meanders above the 200-HSMA, as bull’s eye $1,800.

Gold (XAU/USD) recovers some of Monday’s losses, advances during the New York session, trading at $1,785 at the time of writing. As portrayed by global equity markets, the market sentiment is upbeat, pointing to the upside, due to positive news on the COVID-19 omicron variant. The newly discovered strain, albeit being more contagious, patients infected with it have shown only mild symptoms. Additionally, during the European session, an antibody treatment by Glaxo works on the omicron variant, easing investors’ worry about the possibility of an economic slowdown.

That said, US equity markets are rising between 1.55% and 3.02%. Meantime, US bond yields, which correlates inversely to the non-yielding metal, with the 10-year are flat at 1.44%, a headwind for the greenback, with the US Dollar Index, barely up 0.08%, sitting at 96.41.

Last week, Fed’s Chair Jerome Powell, alongside some US central bank policymakers, expressed that a faster bond-taper would be needed due to elevated prices. In fact, Chair Powell said that the word “transitory” has to be removed when speaking about inflation, reflecting that it is more stickier than expected. That keeps XAU/USD traders focused on the Consumer Price Index for November, to be unveiled on Friday.

XAU/USD Price Forecast: Technical outlook

In the 1-hour chart, XAU/USD seesawed around $1,772-$1,783, within a narrow-trading-range, as the 200, 50 and the 100-hour simple moving averages (SMA’s) lie at $1,784.27, $1,780.55 and $1,778.11, respectively. From a technical perspective, gold is neutral, though the fact that the 50-HSMA could cross over the 200-HSMA that would form a golden cross that could spur a gold rally.

However, in the short term, in the outcome of breaking above the 200-HSMA, the first resistance would be December 6 high at $1,787.64. The breach of the latter would expose the confluence of a downslope trendline and the R2 daily pivot level around $1,793, followed by an R3 daily pivot at $1,798.

On the flip side, a break below the 100-HSMA would open the door for further losses. The first support would be December 6 low at $1,775.63, followed by S1 daily pivot at $1,773.27, and then the S2 daily pivot at $1,768.44.