XAU/USD remains below $1,825

• XAU/USD is trading sideways at $1,820 as it failed to react to the latest US retail sales report.
• Gold follows the lead of dovish bond and currency markets ahead of more US data later in the session.

Given the recent stabilization of the US dollar and US bond yields, it is not surprising that gold prices (XAU/USD) have continued to move sideways in the $1,820 area. At current levels around $1,825, XAU/USD is trading slightly higher on the day as traders now await more Fed statements and US data in the form of December industrial production and the survey. Michigan sentiment chart for January. The latest retail sales report for December, despite being significantly weaker than expected, did not move the currency, bond or gold markets much.

Gold traders will look to the currency and bond markets for direction next week as debate continues over whether recent USD weakness will prove transitory and whether the bull run in US bond yields witnessed last week has more stages. In the next weeks. Otherwise, and if the dollar continues to slide while long-dated US bond yields retreat to 2021 levels, gold bulls will look to break above recent highs in the $1,830 area. Such a breakout could open the door to a run to Q4 2021 highs in the $1,870-$80 zone.

Conversely, if the Fed’s recent hawkish bias plus the recent string of strong level one US data releases were to translate into downward buying of the dollar and a reinforced belief that the Fed will make good on its promise to eventually return to put rates in the 2.5% area, sending long-term yields higher, gold’s fortunes could be much worse. In this case, the precious metal could be seeing a quick drop below $1,800 and a test of the recent lows at $1,780.

Technical levels