In light of the thin market conditions ahead of the long New Year’s weekend, the price of gold is continuing its recent recovery over the $1,800 level.
The US Dollar is unable to take advantage of safe-haven flows as a result of China’s increase in COVID-19 infections, which allows the shining metal to gain some ground.
The US dollar is being held back by the risk-averse inflows into the US bond markets, which are pushing down Treasury bond yields.
Investors find the non-yielding gold price to be appealing due to falling Treasury bond yields.
A number of nations, including the US, the UK, and Japan, have placed limitations on arrivals from China after China announced on Monday that it would cease quarantine rules for incoming tourists on January 8. As China’s economy is reopened.
XAU/USD Technical Analysis
The gold price’s short-term technical outlook is almost unchanged as the yellow metal continues to wave inside of an ascending triangle formation. The ascending triangle breakout won’t be confirmed until a daily closure above the resistance of the horizontal trendline (triangle).
The multiple-month high at $1,833 will be the following upside target on buyers’ radars. The psychological $1,850 mark will be visible farther up.
The bullish potential is still supported by a bull cross confirmation and the bullish 14-day Relative Strength Index (RSI).
On the downside, the price of gold may retrace its steps toward Tuesday’s low of $1,800. At $1,795 (the intersection of the rising trendline (triangle support line) and the bullish 21-Daily Moving Average), the next significant support is waiting (DMA).
A triangle’s potential negative break could be daily close below the latter, which can throw bulls off balance.
