Gold Price Forecast: XAU/EUR slides down to €1,570s, despite EUR weakness across the board

• Gold slides on COVID-19 restrictions spurred by the omicron variant’s rapid spread.
• The German 10-year bund is flat at -0.3530%.
• XAU/EUR Price Forecast: Doji in the daily chart opens the door for further upside.

Gold (XAU/EUR) vs. the euro is barely down during the day, trading at €1,572.06, down some 0.01% at the time of writing. Concerns about COVID-19 restrictions and the omicron variant’s rapid spread dented investors’ mood, thus, in this case, favoring the low-yielding euro.

COVID-19 restrictions around the Eurozone led by Germany and Austria also kept the EUR under pressure against the greenback, but it seems that gold bulls were absent, failing to push prices higher. Additionally, the 10-year German bund is flat during the day, at -0.353%, which dragged XAU/EUR prices slightly down despite being static.

XAU/EUR Price Forecast: Technical outlook

XAU/EUR has an upward bias depicted by the daily moving averages (DMA’s) residing below the spot price, which is approaching the confluence of the 50-day moving average and the June 1 pivot low around the €1,565-45 area, that in this case acts as support. At press time, gold is forming a candle pattern called “doji” meaning that the downside move could be exhausted, but the lack of buyers failed to push the price higher.

If gold aims higher, the first resistance would be the December 7 high at €1,589.26. A breach of that level, the XAU/EUR would aim towards the November 26 high at €1,609.65, followed by the robust resistance area around €1,640-50.

Contrarily, if XAU/EUR edges down, the first support is the confluence of the 50-DMA and the June 1 low around the €1,565-45 range. A break below that demand zone would send gold towards the December 2 low at €1,555.31, followed by the 100-DMA at €1,538.52.