Gold Price Forecast: XAU/USD hovers around $1820 after US ADP Employment data, Fed minutes eyed

• XAU/USD’s advances during the New York session some 0.42%.
• Covid-19 Omicron variant woes and lockdowns in China triggered a risk-off market mood.
• XAU/USD Price Forecast: Neutral biased, but subject to a breakout.

Gold spot (XAU/USD) advances during the North American session, trading at $1,822 at the time of writing. The market sentiment is a mixed bag, with European and US stock indices fluctuating between gainers and losers, amid the spread of the Omicron variant, with Hong Kong reimposing social restrictions. At the same time, two Chinese cities enter into lockdown, spurring a risk-off market mood.

On Tuesday, Minnesota Federal Reserve President Neil Kashkari, one of the doves of the Fed and voter in 2022 in the Federal Open Market Committee, said that he expects at least two rate hikes in 2022.

Before Wall Street opened, the US ADP National Employment Report showed that private payrolls for November surged by 807K more than the 400K estimated by analysts. The same data reported a revision lower for October’s reading from 534K down to 505K.

The data could prelude the Nonfarm Payrolls to be released on Friday, January 7th, by the US Bureau of Labor Statistics. Economists expect the employment figures to come at 400K, while the Unemployment Rate is expected to drop from 4.2% to 4.1%.

Later in the day, the Federal Reserve will release the FOMC December’s 2021 minutes.

In the meantime, US T-bond yields drop, with the 10-year benchmark note, falling one and a half basis points, sitting at 1.653%, a headwind for the greenback, with the US Dollar Index sliding 0.34%, below the 96.00 yardstick for the first time in the week, at 95.93.

XAU/USD Price Forecast: Technical outlook

Gold’s daily chart depicts that the yellow metal has a neutral bias despite trading above the $1,800 threshold. The daily moving averages (DMAs) reside below the spot price in a horizontal linear fashion, trendless, with the 200-DMA trapped between the 50-DMA on the top and the 100-DMA at the bottom.

To the upside, XAU/USD’s first resistance would be $1,834. A breach of the latter would open the door for a test of November 16, 2021, a daily high at $1,877, followed by $1,900. A clear break of that level would open the door for a test of 2021 high at $1916.

On the flip side, failure at the abovementioned leaves the $1,800 psychological level as the first support for gold prices. In the event of breaking lower, it would expose crucial demand levels, being the next one, the 200-DMA at $1,799, followed by the 100-DMA at $1,793, and then the December 15, 2021, cycle low at $1,753.