Optimistic market players maintain XAU/USD above the $1,800.00 threshold on Wednesday, with the bright metal trading near its recent multi-month high of $1,824.53 a troy ounce. The US Dollar recovered some ground throughout the first half of the day, but the advance was shallow and short-lived. Volatility declined after financial markets completed digesting the latest bout of central banks’ announcements and ahead of the year-end holiday.

The daily chart for the XAU/USD pair shows that it has lost its bullish strength, but the risk remains skewed to the upside. Gold keeps trading above all of its moving averages, while the 20 SAM crosses above the 200 SMA, converging at around $1,784.80. The Momentum indicator heads south within positive levels, resting above its 100 line, while the RSI indicator consolidates near overbought readings, suggesting absent selling interest.

In the near term, and according to the 4-hour chart, bulls also have better chances. Technical indicators have eased modestly but remain well above their midlines, with the RSI holding near overbought readings. At the same time, the 20 SMA heads firmly north above the longer ones, which also present upward slopes. The $1,812-$1,810 horizontal resistance breakpoint now seems to protect the immediate downside. Any further pullback could attract fresh buyers near the $1,800 mark, which, in turn, should help limit the downside near the 200-day SMA. The latter is currently pegged near the $1,786 area and should act as a strong base for the Gold price, which if broken decisively might negate the near-term positive outlook.

Gold might consolidate itself again towards DEMA200

Dec 21 2022