Gold Price Forecast: XAU/USD regains $2,000 despite a better market mood

XAU/USD Current price: $2,004.47

• Stock markets are in better shape on Tuesday, with the US Dollar falling against most major rivals.
• The focus remains on the United States March Consumer Price Index scheduled for Wednesday.
• XAU/USD resumes its advance and aims to retest its recent highs of around $2,040 a troy ounce.

Gold battles to extend gains beyond the $2,000 threshold after falling to $1,981.66 on Monday.  The FX board is all about broad US Dollar weakness amid the better performance of stock markets and looming US inflation figures. XAU/USD trades near a daily high of $2,007.44, as most global indexes trade in the green. In the United States, the Dow Jones Industrial Average is up 146 points to trade at its highest since early January. The Nasdaq Composite, however, is down 0.37%.

Market participants are dropping the Greenback ahead of the United States March Consumer Price Index (CPI)  expected to signal core inflation ticked higher on a yearly basis. A few weeks ago such an outcome would have trigger speculation of a potentially aggressive rate hike from the Federal Reserve (Fed), although that’s not the case following the banking crisis that unfolded in mid-March in the United States. Following the collapse of two local banks, the central bank adopted a more conservative stance on monetary tightening, as draining liquidity to tame inflationary pressures has multiple undesired effects.

Meanwhile, concerns about a recession keep growing. Sluggish macroeconomic data and the unexpected OPEC+ decision to cut oil output fueled a dismal market mood, which seems to be temporarily on pause. Still, risk-averse environments hardly benefit the Greenback these days, with Gold making the most of it.

XAU/USD price short-term technical outlook

The XAU/USD pair daily chart suggests the latest decline was a mere correction and that Gold is ready to resume its advance. The pair holds well above bullish moving averages, with the 20 Simple Moving Average (SMA) providing dynamic support at around $1,973.15. At the same time, the Momentum indicator sharply bounced from around its midline, maintaining its firmly bullish slope, while the Relative Strength Index (RSI) also picked up, currently near 62.

In the near term, and according to the 4-hour chart, XAU/USD is neutral. The pair is above bullish 100 and 200 SMAs, but struggling to overcome a mildly bearish 20 SMA. At the same time, technical indicators lack directional strength and are stuck around their midlines. Bulls may have better chances if the pair overcomes $2,011.70, an immediate static resistance level.

Support levels: 1,998.20 1,987.40 1,973.15  

Resistance levels: 2,011.70 2,024.90  2,035.60

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