Gold Price Forecast: XAU/USD rebounds sharply, back above $1800

• A sharp decline of the US dollar across the board boosts XAU/USD.
• Gold back above $1800, after rebounding more than $10.
• The metal is still down for the day but off lows.

Gold rose more than $10 since the beginning of the American session and recently climbed to $1805. Earlier on Wednesday, it tumbled to $1789, the lowest level since last Thursday.

The dollar reversed its trend and dropped sharply, with the DXY falling under 96.00, to the lowest level since December 1. The decline took place even as US yields rallied. The US 10-year peaked so far at 1.55% and the 30 year at 1.96%, both at monthly highs.

The rally of the last hours in gold, together with the up move in yields, is not normal, as the correlation is usually the contrary. The move could reflect thin trading conditions, a weaker greenback of a somewhat resilient gold.

The rebound in XAU/USD from the 20-day moving average now points further to the upside. The next resistance stands at $1815, and a daily close above should clear the way for a test of the next critical resistance located at $1830/35. On the flip side, $1795 is again a support level to consider, followed by $1789 (daily low / 20-day simple moving average).

Technical levels