Gold Price Forecast: XAU/USD drops from monthly lows cling to $1800

• The yellow metal slides some 0.32% during the New York session, despite unchanged US Treasury yields.
• The market mood switched towards a risk-off mode, boosting the greenback to the detriment of the precious metal.
• XAU/USD Price Forecast: In consolidation but slightly upwards, as bull’s target $1,834.

Gold (XAU/USD) vs. the US Dollar grinds lower during the New York session, trading at $1,805 at the time of writing. Before Wall Street opened,  the market mood was upbeat, as US equity futures pointed to a higher open, as market participants’ worries on the newly discovered Covid-19 strain called Omicron eased. Alongside the aforementioned and some USD strength early in the New York open, put a lid on the yellow metal prices.

In the overnight session, the non-yielding metal rallied up to the R2 daily pivot at $1,819.73, dropping towards $1,800 despite the lack of movement in US T-bond yields. The US 10-year benchmark note is unchanged at 1.48%, failing to reflect the “hawkish” pivot by the Federal Reserve on its last monetary policy meeting, on December 15, were announced a faster reduction to its QE program, eyeing March 2022 as the end of the Covid-19 pandemic stimulus.

In the meantime, the US Dollar Index, which tracks the greenback’s performance against a basket of six rivals, rises 0.13%, up to 96.22, 

An absent US macroeconomic docket has kept gold traders leaning on the dynamics of market mood and the USD. On Wednesday, the US docket will feature Pending Home Sales for November. By Thursday, Initial Jobless Claims and the Chicago PMI would be the last economic data revealed on the most significant economy worldwide.

XAU/USD Price Forecast: Technical outlook

Gold 4-hour chart depicts that the yellow metal is in consolidation, though tilted upwards, as the drop from December’s monthly high was capped by the 200-simple moving average (SMA) around $1,806, which acted as a dynamic support level.

To the upside, Gold’s first resistance level would be the December 28 daily high at $1,820. A breach of that level would expose the September 3 swing high at $1,834, followed by a November 22 daily high test at $1,849.