Gold grinds higher around weekly top, rises for the second consecutive day.Optimism over US stimulus, Omicron studies favor bulls.Cautious mood ahead of US Durable Goods Orders, PCE Inflation for November joins China, White House updates to probe upside.Gold (XAU/USD) stays mildly bid around the weekly top of $1,808 heading into Thursday’s European session. The yellow cheers US dollar weakness amid a sluggish Asian session filled with mixed risk catalysts and a lack of major data/events.
That said, the US Dollar Index (DXY) grinds lower around the week’s low of 96.02 during the four-day downtrend. The greenback’s weakness could be linked to the market’s preparation for the one last shot before the key US data.Meanwhile, China’s biggest-ever lockdown, of around 13 million residents in Xi’an as stated by the Wall Street Journal (WSJ) challenges the optimists. Additionally, doubts over the availability of Pfizer’s pill, joined by French rejection to Merck’s COVID drug, also weigh on the risk appetite.
It’s worth noting that the US Treasury yields and stock futures remain quiet and a light calendar in Asia also acts as extra filters for gold traders.That said, gold traders may remain divided as traders approach Christmas Eve amid light volume. However, the US PCE inflation and Durable Goods Orders for November can entertain the momentum traders. Also important are the aforementioned risk catalysts.
Gold justifies Tuesday’s bullish Doji while crossing the 50-DMA level surrounding $1,800. However, sluggish MACD and steady RSI may challenge the commodity buyers around a two-month-old horizontal area near $1,813-16.It should be noted that the gold’s upside past $1,816 enables the bulls to aim for the tops marked in July and September around $1,834 whereas $1,850 and November’s peak of $1,877 could challenge further upside.Alternatively, $1,780 and an upward sloping trend line from August, around $1,775, restrict short-term declines. However, a clear downside break of the $1,775 will welcome gold bears.