Gold Price Forecast: XAU/USD senses demand above $1,810 amid risk-on impulse

• Gold price has rebounded after picking demand around $1,814.00.
• An increment in the US Initial Jobless Claims impacted the US Dollar Index.
• US President Joe Biden signed a $1.66 trillion bill for funding the U.S. government for CY2023.

Gold price (XAU/USD) has picked up demand after a corrective move to near $1,814.00 in the Asian session. The precious metal corrected after kissing the $1,820.00 resistance but is likely to resume its upside journey as the risk aversion theme has been trimmed.

A solid recovery in S&P500 on Thursday after a two-day sell-off vanished the risk-off mood from the market. Investors stepped in for providing support to the United States equities as value-buying emerged. Meanwhile, a decline in safe-haven’s appeal brought a sell-off in the US Dollar Index. The USD Index dropped to near 103.50, which has been a critical support this week. Significant ease in negative market sentiment also halted the four-day sell-off in the US Treasury bonds.

The US Dollar faced immense heat after an acceleration in the number of weekly jobless claims. Individuals who claimed for the first time for the week ending December 23 rose to 225K. This highlighted a slowdown in the employment process by firms led by higher interest rates.

In early Asia, Reuters came out with the White House Statement as saying, “President Joe Biden on Thursday signed a $1.66 trillion bill for funding the U.S. government for the fiscal year 2023.” Reuters also stated that the bill was passed by Congress in the last week and was recently signed by Biden while he is on vacation to the Caribbean island of St. Croix. Fresh stimulus in the United States economy could lead to a drop in the US Dollar Index ahead.

Gold technical analysis

Gold price is advancing towards the horizontal resistance of the Ascending Triangle chart pattern formed on a two-hour scale. The horizontal resistance of the aforementioned chart pattern is placed from December 13 high at $1,824.55 while the upward-sloping trendline is plotted from December 16 low at $1,774.36.

The precious metal is auctioning above the 20-period Exponential Moving Average (EMA) at $1,811.23, which indicates that the upside trend in the short term is solid.

Meanwhile, the Relative Strength Index (RSI) (14) is looking to break inside the bullish range of 60.00-80.00.

Gold two-hour chart