Gold Price Forecast: XAU/USD holds on to gains above the $2,050 mark

XAU/USD Current price: 2,051.10

• A holiday in the US maintains markets ranging, although the sentiment is sour.
• The US calendar has little to offer this week, investors keep an eye on inflation and Davos.
• XAU/USD is marginally bullish in the near term, needs to clear the $2,062.35 resistance area.

Gold Price holds on to gains, trading near an intraday high of $2,058.55. XAU/USD hovers above $2,050 a troy ounce in a quiet American afternoon, as United States (US) markets are closed amid the Martin Luther Day Holiday.

The week started with optimism, as reflected by the positive tone of Asian shares, but the positive sentiment faded during European trading hours, as tepid local data weighed EU indexes lower. Across the FX board, the US Dollar trades mixed, particularly stronger against commodity-linked currencies, usually more sensitive to risk-off.

Beyond the holiday, the US macroeconomic calendar has little to offer this week. The country will release  December Retail Sales next Thursday and the preliminary estimate of the January Michigan Consumer Sentiment Index on Friday. The focus will remain on inflation, as Canada, the United Kingdom, Germany, and the Eurozone will post updates. Investors will also keep an eye on the World Economic Forum in Davos, which will feature speeches from major central bankers and authorities.

XAU/USD short-term technical outlook

From a technical perspective, XAU/USD seems poised to extend its recovery. The pair holds above a mildly bullish 20 Simple Moving Average (SMA) in the daily chart while it consolidates at the upper end of Friday’s range. At the same time, the 100 SMA is crossing above a flat 200 SMA, both in the $1,960 region. Finally, technical indicators are directionless, with the Momentum indicator stuck to its 100 level and the Relative Strength Index (RSI) holding at around 57.

In the near term, and according to the 4-hour chart, the risk skews to the upside, although additional confirmation is required. XAU/USD meets intraday buyers around a flat 100 SMA, while the 20 SMA crosses above a directionless 200 SMA  below it. Technical indicators, in the meantime, remain within positive levels, ticking marginally higher but lacking enough momentum to confirm another leg north. Friday’s high at $2,062.33 is the level to watch, as a break above it should lead to additional gains towards the $2,100 mark.

Support levels: 2,049.15 2,037.90 2,024.50

Resistance levels: 2,062.35 2,074.40 2,087.00