Gold (XAU/USD) Forecast Suggests $1800 Price Level Is Important For Bulls
After defending the 200 SMA on the daily chart, the gold (XAU/USD) has managed to find new buyers. The 200 SMA (daily) in gold (XAU/USD) was acting as dynamic support and helped the precious metal jump higher from $1785. Looking ahead, experts believe the next target for gold (XAU/USD) is the $1800 resistance level.
Considering it is a round figure, it will be an important target for the bulls to achieve. Similarly, the bears could lose further momentum if the $1800 price level is pierced with good momentum.
But if we get a close below $1777, which also coincides with the 21 SMA (daily), then the selling pressure will increase in gold (XAU/USD).
$1800 Is Next Resistance For Gold (XAU/USD)
So in a sense, you can say that a battle is going on between the market forces (bears & bulls) to determine the next direction for gold. For the bulls, the $1800 price level in gold (XAU/USD) is important resistance to break. Similarly, we will also see more selling around the $1800 level as sellers will try to defend this level.
But $1800 isn't the only hurdle for the gold (XAU/USD) bulls... Technical analysis of gold (XAU/USD) suggests that there is also a resistance located at $1814, which is the high made on 14th December.
Similarly, the 200 SMA (daily) in gold (XAU/USD) charts is also an important level for the bears. If they manage to breach this dynamic support, it will lead the gold (XAU/USD) prices toward the 21 SMA (daily) or the 20 SMA (daily). If both of these moving averages are broken, then the gold (XAU/USD) prices will likely touch the $1750 price level.
If we look at the fundamental analysis of Gold (XAU/USD), the interest rate hikes in the USA will continue for the next 5-6 months at least. However, the intensity and the size of each rate hike may become small as inflation is brought under control. This means there is a good chance of the US Dollar becoming weak which would lend strength to gold (XAU/USD).