The US Dollar struggles to capitalize on the overnight solid rebound from its lowest level since late June and attracts some sellers near a technically significant 200-day Simple Moving Average (SMA). As investors seek clarity on the Federal Reserve's rate-hike path, a fresh leg down in the US Treasury bond yields weighs on the Greenback. This, in turn, is seen as a key factor driving flows towards the Dollar-denominated Gold price.

From a technical perspective, repeated failures to find acceptance or build on the momentum beyond the very important 200-day SMA favours the XAU/USD bears. That said, the emergence of fresh buying on Tuesday warrants some caution before confirming a near-term top for Gold price and positioning for a deeper corrective pullback.

Meanwhile, a subsequent move back above the $1,782-$1,783 horizontal resistance could lift Gold price back to the 200 DMA, closer to the $1,800 mark. The next relevant hurdle is pegged near the $1,810 area, or the multi-month top touched on Monday, above which Gold price seems poised to appreciate further. The momentum could then accelerate towards the $1,830 intermediate hurdle en route to the $1,843-$1,845 supply zone.

On the flip side, the overnight swing low, around the $1,769-$1,768 region, now becomes immediate support to defend ahead of the $1,761-$1,760 horizontal resistance breakpoint. A convincing break below will negate any near-term positive outlook and shift the bias in favour of bearish traders. Gold price might then turn vulnerable to accelerate the fall further towards the $1,738-$1,737 area before dropping to the $1,725 level.

Taking bullish overnight swing position on gold

Dec 06 2022