Gold prices held steady in holiday thinned trade on Thursday. The rationale for the move is due to the a weaker dollar offset amid renewed risk appetite which is boosted by an encouraging Omicron study and increased optimism around the global economic outlook.

The United States on Wednesday authorized Pfizer Inc’s PFE.N antiviral COVID-19 pill for people aged 12 and older at risk of severe illness.

Elsewhere, Central banks are tightening monetary policy; along with the U.S. Federal Reserve adopting a hawkish tone at its latest policy meeting favors the market mood. Moreover, US President Joe Biden’s Build Back Better (BBB) stimulus plan and studies which shows that infection with Omicron is significantly less likely to result in hospitalization keep the buyers hopeful.

“Ongoing data strength should help bolster Fed pricing, particularly amid reports that omicron appears to be leading to fewer hospitalizations,” TD Securities analysts said in a report.

As far as data is concerned, Wednesday’s data from the U.S. showed that the GDP grew 2.3% quarter-on-quarter in the third quarter of 2021. Existing home sales were at 6.46 million for November and the Conference Board Consumer Confidence index was at 115.8 for December.

On the other hand, the continuous, rapid spread of the omicron COVID-19 variant remains a concern. China’s biggest-ever lockdown in Xi’an and the doubts of White House over the availability of Pfizer’s pill, joined by French rejection to Merck’s drug, pose a challenge in the market sentiment.

Elsewhere, more data is due later in the day, including initial jobless claims, new home sales, durable goods orders, and the PCE price index and University of Michigan consumer sentiment which may direct the quote further.

XAU/USD 4 Hour Chart:

Support: 1790.9 (S1), 1778.6 (S2), 1771.6 (S3).

Resistance: 1810.3 (R1), 1817.3 (R2), 1829.6 (R3).

Market optimism favors the precious yellow metal and we expect a bullish trend for XAU/USD.