#XAUUSD @ 1,803.94 Gold price stays pressured towards 21-Daily Moving Average after snapping two-day winning streak., @nehcap view: Limited downside expected (Pivot Orderbook analysis)

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• Gold price stays pressured towards 21-Daily Moving Average after snapping two-day winning streak.
• United States Treasury bond yields renew multi-day high as optimism surrounding China propels inflation fears.
• US Dollar regains upside momentum but Gold price remains depressed despite holiday season.

The pair currently trades last at 1803.94.

The previous day high was 1833.38 while the previous day low was 1800.46. The daily 38.2% Fib levels comes at 1820.8, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1813.04, expected to provide resistance.

Gold price (XAU/USD) remains defensive around $1,805, after printing the first daily negative closing in three, as bears struggle to retake control amid the lackluster holiday season. In doing so, the yellow metal portrays the market’s fresh fears of inflation, emanating from China, as well as geopolitical tension surrounding Russia and Ukraine, which in turn propel US Treasury bond yields and the US Dollar. However, the lack of major data/events joins the strong presence of the 21-Daily Moving Average (DMA) support to challenge the precious metal’s immediate downside.

China’s almost total repeal of the “Zero-Covid” policy initially triggered the market’s optimism before Gold traders feared the negative outcomes, especially in the form of rising inflation due to the dragon nation’s push for a faster reversal of the lost economic momentum during COVID-19. On Wednesday, China’s Civil Aviation Authority stated that they will gradually start taking applications from domestic and foreign airlines for international passenger charter flights.

Other than the inflation fears, the doubts over the official virus numbers pushed some of the major economies, including the US to announce restrictive measures for Chinese travelers. Recently, the US Health Official mentioned, “Beginning January 5, all passengers from China aged 2 and up will be required to undergo a Covid test two days before departure.” Previously, India, Japan, Taiwan and Italy announced requirements for COVID tests for visitors from China.

Also teasing the Gold sellers was news from Reuters suggesting inconsistent virus details from Beijing. “China reported three new COVID-related deaths for Tuesday, up from one for Monday – numbers that are inconsistent with what funeral parlors are reporting, as well as with the experience of much less populous countries after they re-opened,” reported Reuters.

Hence, fears surrounding China, one of the world’s biggest Gold consumers weigh on the metal prices despite the Asian major’s attempt to please markets.

Not only China, but geopolitical concerns surrounding Russia and Ukraine also exert downside pressure on the Gold price. As per the latest updates from Ukrainian Military, per Reuters, “Russian forces increased mortar and artillery attacks on the city of Kherson more than six weeks after it was retaken by Ukrainian troops, while also exerting pressure along frontlines in the east.” In this regard, Russia previously stated that the only agreements that account for the four additional territories joining Russia are feasible.

Given the virus woes and a likely run-up in inflation fueling the recession woes, the US Treasury bond yields refresh a multi-day high and enable the US Dollar to pare recent losses. That said, the US 10-year Treasury yields rose to the highest levels since November 14 while flashing 3.88% by the end of Thursday whereas the US Dollar Index (DXY) rose for the second consecutive day to 104.50 at the latest. It should be noted that the key US bond coupon, namely the 10-year Treasury bond yields, marked the biggest one-day rise since October 19 on Wednesday.

Although the fresh run-up in the US Treasury yields weighs on the Gold price, a lack of major data and events could probe the metal’s moves during the holiday season. Even so, the XAU/USD bears are likely to keep the reins.

Gold price justifies multiple failures to cross upward-sloping resistance lines from early September and October, respectively near $1,835 and $1,848, to retreat towards the 21-Daily Moving Average (DMA) retest, around $1,795 by the press time.

Adding strength to the bearish bias over the Gold price momentum are the downbeat signals from the Moving Average Convergence and Divergence (MACD) indicator, as well as the steady Relative Strength Index (RSI), located at 14.

Even so, the metal’s downside past $1,795 appears limited as the 618% Fibonacci retracement level of the June-September south-run, near $1,778, precedes the 50% Fibonacci retracement level of around $1,747 to challenge XAU/USD bears.

In a case where Gold sellers manage to keep the reins past $1,747, a southward trajectory towards the late November swing low near $1,721 can’t be ruled out.

Alternatively, an upward-sloping resistance line from September, close to $1,835 by the press time, restricts immediate advances of the XAU/USD before the ascending trend line resistance line from October, around $1,848, to restrict the short-term upside of the Gold price.

Should the Gold price remains firmer past $1,848, June’s top near $1,880 and the $1,900 round figure should return to the charts.

Overall, the Gold price remains firmer unless breaking the 21-DMA support even if the XAU/USD bulls appear to run out of steam.

Trend: Limited downside expected

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1804.33 at the time of writing. Pair opened at 1812.83 and is trading with a change of -0.47% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1793.3, 50 SMA 1739.29, 100 SMA @ 1722.43 and 200 SMA @ 1782.26.

The previous day high was 1833.38 while the previous day low was 1800.46. The daily 38.2% Fib levels comes at 1820.8, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1813.04, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1797.73, 1782.64, 1764.81
• Pivot resistance is noted at 1830.65, 1848.48, 1863.57

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