Gold Takes a Breather as U.S. Dollar Recovers
Alex Boltyan | Dec 21, 2022 02:58PM ET
Gold prices took a breather on Wednesday following a sharp rally the previous day, as the dollar recovered modestly across the board despite the pullback seen in U.S. yields.
At the time of writing, the spot price XAU/USD is trading at the $1,815 zone, virtually unchanged on the day, after hitting a six-month high at $1,823 an ounce at the beginning of the New York session.
U.S. bond yields are slightly down this Wednesday, with the United States 2-Year, 5-Year, and 10-Year rates at 4.20%, 3.75%, and 3.67%, respectively. Meanwhile, the greenback, measured by the DXY index, managed to move a tad higher, trading at the 104.10 area by the end of the American session, 0.13% above its opening price after two consecutive days of losses.
U.S. macroeconomic data came in mixed. Existing Home Sales dropped in November for the 10th straight month to an annual rate of 4.09 million, below the market consensus of 4.20 million, while the Conference Board Consumer Confidence Index rose to 108.3 in December, beating the 101.00 forecasts.
From a technical standpoint and according to the daily chart, the yellow metal holds a short-term bullish perspective. Despite indicators sending mixed signals, the XAU/USD price trades above its main moving averages, while the 20-day and 200-day SMA are about to complete a bullish crossover.
On the upside, the immediate resistance level is given by the six-month high of $1,823, followed by $1,842, which is the 50% Fibonacci retracement of the $2,070-$1,615 decline.
On the flip side, the next support levels are seen at the $1,800 psychological level and the $1,785 area, the confluence of 20- and 200-day SMAs.
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