Gold Price Forecast: Will XAU/USD buyers recapture critical 21 DMA hurdle?

Gold price is making headway for another run higher on Friday, having stalled its recovery mode a day before. Gold price is set for the first weekly gain in five weeks, as the United States Dollar (USD) has paused its uptrend ahead of the high-impact United States Services PMI data.

US Dollar eases ahead of United States ISM Services PMI

Gold price is back in the green on the final trading day, with the renewed upside likely due to a retreat in the US Dollar alongside the US Treasury bond yields across the curve. Investors weigh the prospects of more US Federal Reserve (Fed) rate hikes, in the face of increasing worries over a ‘soft-landing’ amidst a mixed slew of economic data releases from the United States.

Hot inflation in the Eurozone and the US pushed global yields higher, sending the US Treasury yields to multi-month highs in tandem, which limited the upside in the Gold price. However, the benchmark 10-year US Treasury bond yields have pulled back from four-month highs, motivating Gold bulls once again.

Attention now turns toward the US ISM Services PMI data for February due later in the North American session for a fresh take on the Fed expectations, especially after Atlanta Fed President Raphael Bostic said that "slow and steady is going to be the appropriate course of action," which took the wind out of the US Dollar rebound.

The headline US Services PMI is seen easing to 54.5 vs. 55.2 previous. Meanwhile, the ISM Services Prices Paid (Feb) is likely to drop sharply to 64.5, compared to 67.8 reported previously.

Gold price technical analysis: Daily chart

Gold buyers seem to have regained footing early Friday, allowing Gold price to head back toward the weekly high of $1,844.

At that level, the bearish 21-Daily Moving Average (DMA) coincides, making it a powerful resistance. Gold bulls yearn for a daily candlestick closing above the latter to add extra legs to the ongoing recovery in the bright metal.

Fresh buying opportunities will be created above the 21 DMA hurdle, fuelling a rally toward the mildly bullish 50 DMA at $1,858.

Note that the falling wedge breakout, confimed earlier this week, still remains in play. However, the bearish 14-day Relative Strength Index (RSI) remains a cause for concern for Gold bulls.

If they fail to find acceptance above the 21 DMA barrier, then Gold price could come under intense selling pressure. The previous day’s low of $1,830 will be the first in sight for Gold sellers, below which a test of the $1,820 round level will be inevitable.

Further south, the confluence zone of the February 28 low and the ascending 100 DMA between the $1,805-$1,801 price range could act as a strong demand area.