Gold Price Forecast: XAU/USD struggles below $1,800 on firmer yields

• Gold price remains mildly bid despite the US Dollar’s latest rebound.
• BOJ-linked slump in equities, bonds underpin Gold’s safe-haven buying.
• Headlines surrounding China, global recession also probe XAU/USD bulls but light calendar, holiday mood stop seller’s entry.

Gold price (XAU/USD) clings to mild gains near $1,790 during early Tuesday morning in Europe, despite the US Dollar’s rebound from the intraday low. The reason could be linked to the market’s rush towards risk safety.

The Bank of Japan’s (BOJ) surprise action triggered the risk aversion wave for a few hours, which in turn propelled the bond yields and drowned the prices of commodities. However, the US Dollar Index failed to overcome the daily loss and challenged the Gold sellers afterward.

Recently, the BOJ tweaked its policy to widen the Yield Curve Control (YCC) measures while keeping the monetary policy unchanged.

Also underpinning the risk-off mood could be the economic fears surrounding China, as well as the globe. Behind the moves could be the World Bank’s cut in China’s economic forecasts as well as the hawkish actions of the major central banks to tame inflation, especially when the recession fears are already looming.

Against this backdrop, S&P 500 Futures and the Asia-Pacific stocks print losses while the US 10-year Treasury yields rise for the third consecutive day to refresh the monthly peak near 3.70%, at 3.67% by the press time.

Moving on, risk catalysts are the key for the Gold traders to watch amid a light calendar. Among them, central bank updates and headlines surrounding China and Russia will be crucial.

Technical analysis

A one-week-old descending resistance line, around $1,793 by the press time, restricts the short-term Gold upside amid gradually improving RSI (14) and firmer MACD signals.

As a result, the XAU/USD buyers are likely to portray another attempt in crossing the $1,793 hurdle, which in turn will highlight a downward-sloping resistance line from December 05, near $1,800 at the latest.

Following that, a run-up toward the monthly high near $1,824 can’t be ruled out.

Alternatively, pullback moves remain elusive unless the Gold stays beyond a two-week-old ascending support line, close to $1,776 by the press time.

Gold: Hourly chart

Trend: Further upside expected