XAU/USD pokes weekly resistance near $1,800 on softer US Dollar

  • Gold price seesaws around intraday high after bouncing off one-week low the previous day.
  • US Dollar fades recovery moves from six-month low amid year-end sluggish markets, softer US data.
  • US Core PCE Price Index appears the key for XAU/USD traders amid hawkish Fed concerns.
  • Mixed headlines from China, light calendar elsewhere favor Gold buyers.

Gold price (XAU/USD) grinds higher towards $1,800, refreshing intraday top near $1,795 by the press time, as a softer US Dollar allows the Gold buyers to keep the reins during early Monday. In doing so, the bright metal extends the previous day’s recovery from a nearly eight-day low amid a sluggish last to the likely dull week.

That said, the US Dollar Index (DXY) prints the first daily loss in three, down 0.18% intraday near 104.58, amid cautious optimism in the market, which in turn teases XAU/USD bulls to return.

In doing so, the DXY struggles to justify the recently hawkish comments from Federal Reserve Bank of Cleveland President Loretta Mester and New York Federal Reserve President John Williams. The reason could be linked to Friday’s downbeat prints of the preliminary US PMIs for December, as well as the Fed’s 0.50% rate hike.

Elsewhere, recession fears keep the Gold bears on the table as global central banks defend their hawkish bias amid higher inflation fears. Additionally, mixed concerns surrounding China’s improvement in the Covid conditions also challenge the XAU/USD bulls.

Looking forward, Friday’s US Core Personal Consumption Expenditures (PCE) – Price Index, expected 4.6% YoY and 5.0% previous readings, will be important for the Gold traders as the same is the Fed’s preferred inflation gauge.

Gold price technical analysis

Gold struggles to defend the bounce off the $1,780 support confluence, comprising the 100-SMA and a five-week-old ascending trend line.

That said, bullish MACD signals and firmer RSI (14) keep Gold buyers hopeful of crossing the one-week-old descending resistance line, around $1800.

However, an upward-sloping trend line from November 15, close to $1,830 by the press time, will be a tough nut to crack for the Gold buyers.

Alternatively, a downside break of the $1,780 support confluence could quickly drag the Gold price toward the monthly low near $1,765.

Following that, a six-week-long horizontal support area surrounding $1,720 could challenge the Gold bears before highlighting the $1,700 threshold.

Gold price: Four-hour chart

Trend: Limited upside expected


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