Gold Price Forecast: XAU/USD sees a dead cat bounce, with death cross in play

• Gold’s recovery appears shallow amid a risk-on mood.
• Covid vaccine and stimulus optimism led reflation trade weighs.
• Weaker DXY lends support to XAU/USD but the daily chart warrants caution.

Gold (XAU/USD) has stalled its three-day decline but struggles to find its feet amid the upbeat market mood. The reflation trade keeps the market mood buoyed on prospects of US stimulus and coronavirus vaccine-driven faster global economic recovery.

The riskier assets such as the Treasury yields are on the rise, weighing negatively on the non-yielding gold. The renewed US-Iran geopolitical tensions fail to attract the gold buyers, as the daily technical chart continues to paint a bleak picture, in absence of fresh economic releases from the US.

Gold Price Chart - Technical outlook

Gold: Daily chart

As observed in the daily chart, the gold price faces stiff resistance around $1827, as of writing.

The near-term technical set up favors bears after a death cross was charted on the said timeframe a day before. The death cross formation is registered after the 50-daily moving average (DMA) cuts the 200-DMA from above.

Further, the 14-day relative strength index (RSI) trades within the bearish region, backing the case for additional downside.

A test of the Feb 8 low of $1808 remains on the sellers’ radar, below which the January 18 low of $1803 could be put at risk.

Meanwhile, the bearish bias remains intact so long as the price holds below the 21-DMA at $1838. The next powerful hurdle awaits at $1858, the confluence of the 50 and 200-HMAs.