Gold prices gained upward momentum on Thursday after moving sideways over the last few days, as U.S. yields pulled back and the dollar, measured by the DXY, lost more than 1% below 103.00. At the time of writing, spot gold, XAU/USD, trades at $1,842, up 1.4% from its opening price and posting a second straight day of gains.
Concerns about global economic growth are weighing on investors' confidence, favoring gold as a shelter and hedge against inflation. Fed’s monetary tightening, the Ukraine war, and lockdowns in China are the main factors fueling fears of a recession, causing capital to flow into safe-havens.
Against this backdrop, bond yields are pulling back,– which can be considered the opportunity cost of holding gold. The yield on the United States 10-Year note fell to its lowest level in three weeks at 2.774%. From a technical standpoint, XAU/USD's short-term outlook remains from neutral to slightly bullish after the price climbed above the 200-day moving average at the $1838 zone.
The RSI has gained a significant positive slope, although it hovers below its midline, while the MACD suggests growing buying interest. If the upward correction continues, immediate resistance is seen at a broken ascending trendline around $1,850. If this level is broken, the next barriers could be found at the 20- and 100-day moving averages at $1,862 and $1,885, respectively.
On the other hand, the immediate support zone is seen in the $1,810-$1,800 range, followed by the three-month low of $1,786 struck earlier this week.