The safe-haven precious metal will likely continue to struggle below the $1,800 psychological level
Gold prices keep struggling below the $1,790 region where the 100- and 200-DMAs converge, representing the immediate and critical resistance at this stage. The yellow metal regained some upside momentum today after a local depreciation on Monday. Still, the XAUUSD pair lacks drivers to make a decisive break above the mentioned moving averages that have nee capping gains for two weeks already.
Ebbing omicron fears ease demand for the safe-haven gold as South Africa is seeing no acceleration in new infections, while a steady dollar adds to bearish factors. Also, the RBA’s decision fueled investor optimism earlier today. The central bank left interest rates unchanged, as expected, while also noting that it will not increase the cash rate until actual inflation is sustainably within the 2% to 3% target range. Expressing cautious optimism, the RBA added that the economy is expected to return to its pre-delta path in the first half of 2022.
Also on the positive side, a China Communist Party official hinted at easing in curbs on the real estate industry. As a reminder, the PBOC cut Reserve Requirement Ratio. Today, the central bank announced a cut on its relending facility rates to support the rural sector and small firms.
On the data front, industrial production in Germany climbed by 2.8% month-on-month versus a 0.8% rise expected and -1.1% last.
Against this backdrop, the safe-haven precious metal will likely continue to struggle below the $1,800 psychological level in the days to come, with downside risks persisting. On the downside, the trendline around $1,760 could cap potential losses. Should this support give up, the $1,750 region will come into the market focus.
