Gold Price Forecast: XAU/USD hits fresh eight-week highs near $1850

• Gold rises for the second day in a row, heads for the highest close in two months.
• Dollar mixed across the board as equity prices rebound.

Gold broke to the upside following US economic data, and it peaked during the American session at $1847, the highest level in almost two months. It holds a bullish tone but shows difficulties holding above $1845.

Metals are up for the second day in a row. XAG/USD is up 1.78% at $24.58, the highest level since November 22. Gold and silver have broken relevant short-term technical levels boosting further the upside.

Another factor helping metals is the pullback in US yields from the recent peak together with Thursday’s rebound in Wall Street. The Dow Jones gains 0.83% and the Nasdaq 1.47%.

Economic data in the US came in mixed. Initial Jobless Claims jumped to 286K, the highest level in three months and significantly above expectations. On the positive, the Philly Fed Index rose from 15.4 to 23.2 in December. The last report, Existing Home Sales came in at 6.18 million (annual rate) below the 6.44 of market consensus.

Levels to watch

The technical bias continues to point to the upside, after breaking on Wednesday the $1830 area. Now XAU/USD is facing resistance in the band $1845/50. Above resistance levels are seen at $1855 followed by $1864.

A pullback under $1830 should remove the positive bias and favor further losses, targeting $1820 initially and then $1810.

Technical levels