Gold Price Forecast: XAU/USD bulls retain control near one-week high, just above $1,760

• Gold price climbs to a one-week high on Monday and draws support from a combination of factors.
• Bets for less aggressive rate hikes by the Federal Reserve weigh on the US Dollar and offer support.
• China’s COVID-19 woes weigh on investors’ sentiment and further benefit the safe-haven XAU/USD.

Gold price reverses an intraday dip to the $1,746 area and climbs to over a one-week high during the first half of the European session. Currently trading just above the $1,760 level, the XAU/USD is now looking to build on last week's goodish bounce from the $1,725 region amid the emergence of fresh US Dollar selling.

Weaker USD continues to underpin Gold price

The prospects for a less aggressive policy tightening by the Federal Reserve continue to weigh on the greenback, which, in turn, is seen benefitting the Dollar-denominated Gold. The minutes of the November Federal Open Market Committee (FOMC) meeting released last week revealed that a substantial majority of policymakers judged that a slowing rate hike would soon be appropriate. Moreover, officials were largely satisfied they could stop front-loading the rate increases and move in smaller steps.

Sliding US Treasury bond yields further benefits Gold price

The dovish assessment of the minutes, meanwhile, cemented market bets for a relatively smaller 50 bps lift-off at the next FOMC policy meeting in December. This is evident from an extension of the recent downfall in the US Treasury bond yields, which is seen as another factor weighing on the US Dollar. In fact, the yield on the benchmark 10-year US government bond drops to its lowest level since September and further contributes to driving flows towards the non-yielding Gold price.

China’s COVID-19 woes also boost the safe-haven Gold price

Apart from this, the risk-off impulse - amid the worsening COVID-19 situation in China - provides an additional lift to the safe-haven XAU/USD. China reported a record-high number of daily infections on Saturday. Moreover, public discontent over the zero-COVID policy flared protests across China and raised concerns about a further slowdown in economic activity. This, in turn, takes its toll on the global risk sentiment and boosts demand for the traditional safe-haven Gold price.

Gold price seems poised to appreciate further

The fundamental backdrop seems tilted firmly in favour of bullish traders and supports prospects for a further intraday appreciating move for Gold price. Hence, a subsequent strength towards the next relevant hurdle, around the $1,770 horizontal zone, looks like a distinct possibility. In the absence of any relevant macro data from the US, traders on Monday will take cues from speeches by influential FOMC members - St. Louis Fed President James Bullard and New York Fed President John Williams.

Gold price technical outlook

From a technical perspective, some follow-through buying beyond the $1,770-$1,772 region will be seen as a fresh trigger for bulls and reaffirm the positive outlook. Gold price might then surpass intermediate hurdles near the $1,778 zone and retest its highest level since mid-August, the $1,786 area touched earlier this month. The momentum could assist the XAU/USD to aim to conquer the $1,800 psychological mark.

On the flip side, the intraday low, around the $1,746 area, now seems to protect the immediate downside ahead of the $1,736-$1,735 region. The next relevant support for Gold price is pegged near the $1,725 zone, or a nearly two-week low touched last Wednesday. A convincing break below the latter might prompt some technical selling and drag spot prices further towards the $1,700 round-figure mark.

Key levels to watch