Gold Price Forecast: XAU/USD recovery seeks daily closing above $1,891, Fedspeak eyed

• Gold price clings to recovery gains, as US Dollar shrugs off firmer US Treasury bond yields.
• China’s economic woes, Fed concerns and US banking jitters affect risk sentiment.
• Gold price needs acceptance above the critical daily resistance line at $1,891. Focus on Fedspeak.

Gold price is holding the previous day’s rebound from five-month lows below $1,900 early Tuesday. The United States Dollar (USD) is struggling to capitalize on the latest upsurge in the US Treasury bond yields, following a tech rally on Wall Street overnight.

US housing data and Fedspeak hold the key

Gold price is looking to build onto its recovery and recapture the $1,900 mark, as the Greenback maintains its corrective mode from two-month highs amid mixed fundamental factors. Risk sentiment remains rather cautiously optimistic in Asia this Thursday, as traders cheer overnight gains in US tech stocks after shares of Nvidia jumped 8.5% ahead of Wednesday’s earnings report, providing supportive ground for local chipmakers.

However, a sense of caution seeped in amid looming Chinese economic risks, in the face of the stimulus disappointment, and expectations that the US Federal Reserve (Fed) could keep interest rates higher for a longer period even after the US central bank brings an end to its tightening cycle. The US Treasury bond yields touched the highest level since 2007 on elevated rate fears. The US Dollar, therefore, finds a floor amid firmer US Treasury bond yields and jittery markets.

Investors also weigh the latest US banking concerns after S&P Global on Monday cut credit ratings and revised its outlook for multiple US banks,  citing large deposit outflows and prevailing higher interest rates. Also, renewed US-China headlines remain in play, with the Wall Street Journal (WSJ) reporting that “Beijing imposes $1.5 million in penalties for unapproved investigations after detaining company staff members in March.”

Further, chatters were doing the rounds that a Chinese nuclear submarine has had a serious accident in or near the Taiwan Strait. In light of these risk factors, the US Dollar is likely to remain supported, capping the further recovery in Gold price.

However, the US housing data and speeches from several Fed policymakers could set the tone for Gold markets heading into Wednesday’s global preliminary PMI reports and all-important Fed’s Jackson Hole Economic Symposium due in the second half of this week.

Gold price technical analysis: Daily chart

Gold price opened Tuesday above the descending trendline resistance at $1,891 on its road to recovery. Gold buyers need a daily closing above the latter to sustain the rebound from multi-month lows.

If that materializes, the next upside target is seen at the $1,900 round figure, above which the upward-sloping 200-Daily Moving Average (DMA) at $1,908 will offer stiff resistance.

Acceptance above the latter will confirm a bearish reversal for Gold price, with the $1,920 mark next in sight.  

The 14-day Relative Strength Index (RSI), however, remains below the midline, keeping Gold sellers hopeful.

The immediate support is seen at the abovementioned resistance now support at $1,891, below which the multi-month lows of $1,885 will be out to test again.

Should the downside resume, a test of the $1,870 static support will be inevitable.