Gold Price Forecasts: XAU/USD steadies below $1,800 amid recession fears, China Covid optimism

• Gold price lacks clear directions as sellers attack the key support amid mixed clues.
• XAU/USD traders remain confused as recession woes contrast with China losing Zero-Covid policy.
• Pre-Fed caution, downbeat US inflation expectations also act as trading filters.
• Risk catalysts could entertain Gold traders ahead of the busy days starting from Thursday.

Gold price (XAU/USD) treads water around $1,770 as bulls and bears jostle amid light calendar and mixed clues during early Wednesday.

The yellow metal’s struggle for clear directions recently got amplified as China’s trade surplus eased in November as the Imports and Exports both dropped during the stated month. On the same line is the gradual pick-up in the US Treasury yields amid fears of a global economic slowdown.

It’s worth noting that multiple top-notch company representatives and bank officials have recently raised fears of a global recession. On the same line were comments from Bloomberg Economics.

However, China’s readiness for announcing prudent fiscal and monetary policies, as well as hints of gradually removing the three-year-old Zero-Covid policy, seems to put a floor under the Gold price.

Amid these plays, US stock futures print mild gains but stocks in the Asia-Pacific zone trade mixed. That said, the US inflation expectations fail to defend the hawkish bets on the Fed’s next move during the pre-FOMC blackout.

Looking forward, China’s likely risk-positive announcements and second-tier data may entertain Gold traders ahead of Thursday’s China inflation numbers and Friday’s preliminary readings of the US Michigan Consumer Sentiment Index.

Gold price technical analysis

Not only a clear U-turn from the six-month-old horizontal resistance zone, around $1,805, but the sustained downside break of the 200-DMA, close to $1,794, also keeps the Gold sellers hopeful despite the sluggish MACD signals.

Also acting as a downside filter, as well as the immediate challenge for the XAU/USD bears, is an upward-sloping support line from November 08, close to $1,765.

In a case where the yellow metal remains bearish past $1,765, the previous week’s low surrounding $1,740 may lure the sellers before directing them to the tops marked in September and October, respectively near $1,735 and $1,730.

Alternatively, the 61.8% Fibonacci retracement level of the metal’s June-September downside and the 200-DMA, around $1,779 and $1,794 in that order, could test the Gold buyers before portraying another attempt to cross the $1,805 hurdle.

Overall, the Gold price remains bearish but a clear break of the $1,765 appears necessary for the sellers.

Gold price: Daily chart

Trend: Further downside expected