Gold Price Forecast: XAU/USD hovers around $2,350 with buyers in control

XAU/USD Current price: $2,350.55

• The US Producer Price Index rose by less than anticipated in March.
• The European Central Bank kept its monetary policy unchanged in April.
• XAU/USD resumes its advance and aims to challenge the record high.

Spot Gold recovered some of the ground lost on Wednesday and trades near its daily high at $2,350.69. XAU/USD showed little reaction to Thursday’s headlines as the European Central Bank (ECB) unveiled its decision on monetary policy. On the one hand, the central bank left its monetary policy unchanged, as expected. On the other hand, officials maintain a cautious but optimistic stance, paving the way for a rate cut next summer. President Christine Lagarde repeated they remain data-dependent but noted, “We will get a lot more data by June.”

Meanwhile, the United States (US) reported that the March Producer Price Index (PPI)  rose 0.2% MoM and 2.1% YoY, below expectations. The core annual PP  was up 2.4%, above the 2.3% expected and the 2.1% posted in February. Also, Initial Jobless Claims for the week ended April 5 were up by  211K better than the 215K expected and easing from the previous 222K. The US Dollar shed some ground with the slower-than-anticipated PPI but resumed it after Wall Street’s opening, as stock could not retain the initial momentum.

Stock markets trade mixed, but overall, the market is in a sour mood. The US Dollar extended its advance against most major rivals to fresh weekly highs, while the fact that Gold remains afloat indicates continued demand for safety.

XAU/USD short-term technical outlook

From a technical point of view, the daily chart for XAU/USD shows the risk remains skewed to the upside. Technical indicators have resumed their advances in overbought territory after pulling back from extreme readings. At the same time, the pair develops above all its moving averages, which retain their upward slopes.

The near-term picture supports another leg north. In the 4-hour chart, XAU/USD is extending its recovery above a flat 20 Simple Moving Average (SMA), while the longer moving averages keep heading north far below the current level. The Momentum indicator struggles to recover above the 100 level, while the Relative Strength Index (RSI) indicator aims north around 59, reflecting increased buying interest.

Support levels: 2.327.65 2,319.20 2,303.80  

Resistance levels: 2,354.70 2,365.25 2,380.00