Gold Price Forecast: XAU/USD steady above the $1800 barrier as US bond yields rise

• Gold advances some 0.03% during the New York session, despite US T-bond yields rise.
• The 10-year benchmark note meanders around the 1.50% threshold.
• XAU/USD Price Forecast: In the near term, it is neutral-bullish, though it will need a decisive break above $1814 to extend its gains.

As the New York session begins, gold (XAU/USD) advances some 0.03%, trading at $1,805.65 at the time of writing. Global equity markets continue advancing during the week, as shown by the MSCI Asia Pacific Index up 0.9%, while European equities gain between 0.26% and 3.06%. Increased optimism over the Omicron Covid-19 variant spurred an appetite for riskier assets as the year-end approached. At the same time, the yellow metal finally broke above the $1,800 figure for the second time in the week.

In the US Treasuries complex, US T-bond yields are rising four basis points, with the 10-year Treasury yield at 1.499%, falling to weigh on the precious metal, with which it has a strong inverse correlation.

Macroeconomic data-wise, US Durable Good Orders rose by 2.5%, more than the 1.6% foreseen on a monthly basis. Meanwhile, the Fed’s favorite gauge of inflation, the Core Personal Consumer Expenditure (PCE), increased by 4.7%, higher than the 4.5%, justifying the Fed’s faster bond taper while opening the door for higher rates sooner than later. 

At the same time, Initial Jobless Claims for the week ending on December 17 rose to 205K in line with expectations, showing some consolidation in the labor market. Furthermore, at press time, the University of Michigan revealed its Consumer Sentiment Index for December, which came at 70.6 higher than the 70.4 estimated. 

XAU/USD Price Forecast: Technical outlook

The XAU/USD daily chart depicts that the yellow metal has a neutral-bullish bias in the near term, as the spot price is above the daily moving averages (DMAs), which are “flat” almost horizontal, acting as support levels. Furthermore, the break of a downslope trendline, drawn from mid-November to December 17 swing high, is being tested, that once broke, could pave the way for further gains.

To the upside, the XAU/USD first resistance would be the December 17 cycle high at $1,814. A breach of the latter would expose the September 3 cycle high at $1,834, followed by November’s 22 high at $1,849.

On the flip side, gold’s first support would be the 50-DMA at $1,799.50. A break beneath that level would expose the 200-DMA at $1,791, followed by the 100-DMA at $1,788.