Gold Price Forecast: XAU/EUR retreats Wednesday’s gains, hovers around €1,560

• On Thursday, XAU/EUR pare Wednesday gains, down some 1.49%.
• WHO’s official said that some of the early indications regarding the Omicron variant are that most cases are mild.
• XAU/EUR: The upward bias is still in play, though a daily close above €1,590 is needed to extend gold gains. 

Gold (XAU/EUR) vs. the euro advances as the Asian session begins, up some 0.05%, trading at €1,565 at the time of writing. Investors’ worries about the Omicron coronavirus strain seem to ease, as a World Health Organization (WHO) official said that some of the early indications are that most cases are mild. Either way, financial markets would likely remain volatile unless investors get more clarity on the new COVID-19 variant.

In the overnight session, XAU/EUR seesawed around the €1,560-€1,580 range, remaining at those levels until the New York open. Since then, the gold vs. the euro slid towards €1,555, though staged a recovery of 15, to settle down at current levels.

On Thursday, the macroeconomic docket of the Eurozone featured the so-called “prices at the gate,” with the Producer Price Index for October on a monthly and yearly basis.  Both readings were higher than expected, with the monthly figure rising 5.4%, more than the 3.5% foreseen. The annual figure rose by 21.9%, higher than the 19% estimated.

In the meantime, the German 10-year Bund yield is falling four basis points, sitting at -0.375%, boosting the yellow metal prospects against the single currency. 

XAU/EUR Price Forecast: Technical outlook

The XAU/EUR daily chart shows that the single currency trimmed some losses against the non-yielding metal, but the bias remains tilted to the upside. Why? Because the daily moving averages (DMA’s) with an upslope reside well below the spot price, signaling that XAU bulls are in charge. In fact, Thursday’s low coincides with the 50-DMA level at €1,557, which would be the first support, if the EUR appreciates

In the outcome of extending Wednesday’s gains, the first resistance would be the November 30 high at €1,590. Breach of the latter could pave the way for further gains. The following resistance would be the €1,600 psychological level, followed by the November 18 cycle low previous support-turned-resistance at €1,633.

On the flip side, the first support would be the 50-DMA at €1,557. The break of the previous-mentioned would expose essential support areas, like the 100-DMA at €1,539, followed by the confluence of 200-DMA and the November 3 low, between the €1,516-20 range.