Gold Price Analysis: XAU/USD climbs to one-week tops, further recovery seems elusive

• A modest USD pullback assisted gold to regain some positive traction on Wednesday.
• Acceptance above 23.6% Fibo. and 200-hour SMA supports prospects for further gains.
• Bearish oscillators on the daily chart warrants might keep a lid on the recovery move.

Gold finally broke out of its intraday consolidative trading range and shot to near one-week tops, around the $1723-24 region during the early North American session.

The US dollar surrendered its intraday gains and witnessed some selling in the last hour following the release of a rather unimpressive US consumer inflation figures. This, in turn, was seen as a key factor that provided a modest lift to the dollar-denominated commodity.

That said, the prevalent upbeat market mood held bullish traders from placing aggressive bets around the safe-haven precious metal. Apart from this, a modest pickup in the US Treasury bond yields further collaborated to cap gains for the non-yielding yellow metal.

From a technical perspective, the commodity has managed to find acceptance above the 23.6% Fibonacci level of the $1814-$1677 downfall. Bulls are now looking to build on the momentum beyond 200-hour SMA, though any meaningful recovery still seems elusive.

Technical indicators on the daily chart have just recovered from the oversold territory but are still holding deep in the bearish territory. Moreover, RSI (14) on the 1-hourly chart has already moved on the verge of breaking into the overbought zone.

Hence, any subsequent positive move is likely to confront stiff resistance and might still be seen as a selling opportunity near 38.2% Fibo. level, around the $1730 region. This, in turn, should cap the XAU/USD near the $1739-40 heavy supply zone.

The latter near the 50% Fibo. level, which if cleared decisively will suggest that the commodity might have bottomed out in the near-term. A fresh bout of short-covering might then push the XAU/USD back towards the $1760-65 strong horizontal support breakpoint.

XAU/USD 1-hourly chart

Technical levels to watch