Gold Price Forecast – Weekly Chart Showing Bullish Prelude

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Gold prices hardly changed in the last three sessions although the overall conditions continue to remain favorable for the yellow metal.

As I mentioned in my last forecast article, things around the US-Sino trade dispute might delay further. And, this would make investors go unnerved, making them shift towards hard assets like gold, uplifting its market value.

Weaker US Dollar Index

As you can see in the chart below, the USD Index has been dropping consecutively for the last five sessions. On slipping from 98.55 top level, the index has shed more than 1.2%. At this point, there remain higher chances for a potential reversal in the dollar levels.

Even if the dollar nudges to the upper side in the coming sessions then it must overcome two main barriers. Firstly, there are huge red Ichimoku Clouds in the upper region, spread in the range of 98.00-98.40 levels. Secondly, there is one strong resistance line near 97.85 level which might disallow the bulls’ entry.

DXY 1 Day 06 Dec. 2019
DXY Daily 06 Dec

On the downside, a critical support level remains near 97.13.

Ahead of the day, traders look for US Nov. Non-Farm Payrolls and MoM Average Hourly Earnings.

Meanwhile, Japanese Prime Minister Shinzo Abe has launched the country’s first stimulus since 2016 with a huge package of around ¥13.2tn ($121bn). This package would be used to repair typhoon damage, improve infrastructure and investments in new technologies.

Technical Analysis

1-Week Chart

This week, I can see a slight breakout in the weekly chart. The prices have moved out of the choppy performance bracket that the pair was showing for the last three weeks. Such a price action might act as a prelude for strong price actions in the coming week.

XAU/USD 1 Week 06 Dec. 2019
XAU/USD Weekly 06 Dec

Any movement to the downside would immediately trigger the underlying SMA conflux made up of 50-day, 100-day, 200-day SMAs. Also, the momentum indicator was heading near 50 levels, providing signs for a reversal in the overall trend.

1-Day Chart

On the daily price chart, the XAU/USD pair seems to form a double bottom bullish trading pattern. Though the price actions consolidated in the last few days, the overall momentum continues to stay intact. The Stochastic Oscillator technical indicator was pointing towards ~76 levels, suggesting overbought conditions.

XAUUSD 1 Day 06 Dec. 2019
XAUUSD Daily 06 Dec

Also, make sure to keep an eye for any potential breakout from the pivotal 1475.90 level. Such a breakout would display the strength, concreting hopes for further upside movements.