Gold Price Forecast: XAU/USD retreats at the 50-DMA around $1,780.00 strong resistance at $1,800

• Gold recovers after Friday’s crash, up 18% during the New York session.
• Risk-on market sentiment fueled some flows towards the non-yielding metal, weakening the greenback.
• XAU/USD: Strong resistance at $1,800 threatens to push gold prices towards the 2021 year low.

Gold (XAU/USD) climbs during the New York session, up 0.18%, trading at $1,768.11 at the time of writing. Investors’ mood is in risk-on mode, as solid US corporate earnings show that the US economy is strong, easing concerns about higher inflation. Furthermore, central banks around the globe tightening monetary policy conditions may help to bring down elevated prices. 

Meanwhile, gold, the hedge against inflation, recovered some of its brightness since the Friday crash, which saw the yellow metal tumbling $32.00 on the back of a good US Retail Sales Report.

The US 10-year Treasury yield edges higher three and a half basis points (bps), sits at 1.620, whereas the greenback falls 0.25%, currently at 93.748, as risk appetite decreases the safe-haven status of the buck.

XAU/USD Price Forecast: Technical outlook

In the daily chart, XAU/USD briefly touched the 50-day moving average (DMA) at $1,778.43 but retreated due to intense selling pressure. Around the $1,800 area, the 100 and the 200-DMA’s confluence and a downward slope trendline add stress on gold.

Failure to break above the 100, 200-DMA, and the downward slope trendline, could send gold tumbling towards the October 6 low at $1,765.09. A breach of the latter would expose crucial support levels, as the September 29 low at $1,745.56, followed by the August 9 low at $1,687.78

On the flip side in the outcome of an upside break above the psychological $1,800 could pave the way for further gains, but there would be some hurdles on the way. The first resistance would be September 3 high at $1,834.02, followed by the June 11 high at $1,903.03.