Gold prices fell after two consecutive days of gains on Wednesday, with the spot XAU/USD retesting the $1,800 area amid low trading volume and swinging American bond yields. At the time of writing, the spot price XAU/USD is trading at the $1,808 zone, 0.33% below its opening price, after posting a daily low of $1,797 during the New York session.
U.S. bond yields fell across the curve at the beginning of the day but bounced by the American afternoon, weighing on the yellow metal and sending the price briefly below the $1,800 level. The 2-, 5-, and 10-year bond rates stand at 4.35%, 3.96%, and 3.87%, respectively. In the meantime, the dollar, measured by the DXY index, dropped to a low of 103.84 before trimming losses.
Heading into the year-end, no major data releases are scheduled, with market sentiment driving price action amid thinned-holiday volume. Investors' assessment of the U.S. inflation/growth outlook will determine the bond market movements and, therefore, the yellow metal's price dynamics.
From a technical perspective, the XAU/USD short-term bias remains tilted to the upside, according to the daily chart. Although indicators offer mixed signals, the price trades above its main moving averages after the 20- and 200-day SMAs completed a bullish crossover last week.
On the downside, the following support levels are seen at the 20- and 200-day SMAs at $1,795 and $1,782, respectively, and then at the December lows around $1,770.
On the other hand, the $1,820 and Tuesday's high of $1,833 offer immediate resistance levels. A break above the latter could pave the way for the spot price to advance towards $1,842, which is the 50% retracement of the $2,070-$1,614 slide.