Gold buyers jostle with short-term key hurdle following the biggest daily gains in three weeks.
Sustained trading beyond 200-DMA joins RSI, MACD conditions to keep buyers hopeful.
Gold Price Forecast: Bulls in the drivers seat, eyeing $1,825.60
Gold (XAU/USD) grinds higher during the three-day uptrend, poking the previous support around $1,820 during Tuesdays Asian session.
The yellow metal jumped the most since late January the previous day as downbeat prints of US inflation expectations, portrayed by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, challenge the hawkish Fed concerns.
Also recently underpinning the golds upside momentum are the receding fears surrounding the imminent Russia-Ukraine war and optimism concerning the US-Japan steel trades.
However, worsening covid woes in Japan and Hong Kong, not to forget the US-China trade tussles, challenge the market optimism.
“Hong Kong Chief Executive Carrie Lam is set to discuss further restrictions at an Executive Council meeting on Tuesday after a record number of new coronavirus infections were reported, with cases doubling every three days,” said Bloomberg. On the other hand, Japans Tokyo is up for extending the virus-led quasi-emergency towards early March amid record daily infections.
Against this backdrop, the US 10-year Treasury yields added two basis points to 1.936%, close to the highest levels since late 2020, while the US stock future print mild gains around 4,485 at the latest. That said, the benchmark US T-bond coupons eased from a two-year high the previous day while Wall Street marked sluggish closing.
Additionally, stocks in the Asia-Pacific region also grind higher to portray slightly positive market sentiment while the US Dollar Index (DXY) struggles around a multi-day low as traders await clear signals on the Feds next move.
While the US inflation data will be crucial for the short-term gold moves, todays US Goods and Services Trade Balance for December, expected $-83B versus $-80.2B, can offer intraday directions. However, major attention will be given to risk catalysts.
Read: Do not expect volatility to ease as US CPI is due this week
Technical analysis
Gold extends late Januarys rebound from 61.8% Fibonacci retracement (Fibo.) of September-November 2021 upside to regain its place above the 200-DMA.
As the receding bearish bias of MACD and gradually improving RSI line back the bullions run-up beyond the 200-DMA, a support-turned-resistance line from December 15, 2021, near $1,825, challenges immediate upside.
Also acting as the key short-term upside hurdle is a five-week-old horizontal area between $1,828-32, a break of which will give the command to gold buyers aiming for a fresh 2022 peak, beyond the latest $1,853.
Alternatively, the 200-DMA level of $1,806 and the $1,800 threshold may test short-term pullbacks of gold prices.
Following that, the 61.8% and 78.6% Fibo. levels near $1,780 and $1,753 respectively will lure the bears.
However, a clear downside past $1,753 wont hesitate to challenge September 2021 low near $1,721.
