Gold Price Forecast: XAU/USD regains traction, eyes 50-day SMA at $1,762

  • XAU/USD advanced to a fresh monthly high above $1,750.
  • Next target on the upside is located at $1,762.
  • Buyers are likely to remain in control unless gold makes a daily close below $1,745.

The XAU/USD pair staged a technical correction on Wednesday and posted modest losses. After managing to break above the key resistance area on Thursday, however, gold preserved its bullish momentum and reached its highest level since early March at $1,757. As of writing, the pair was up 1.05% on a daily basis at $1,756.

The sharp drop witnessed in the US Treasury bond yields seems to be fueling gold's rally on Thursday. The benchmark 10-year US Treasury bond yield, which gained 1.7% on Wednesday, turned south in the early American session and was last seen losing 2.32% at 1.637%. Consequently, the greenback is having a hard time finding demand and the US Dollar Index is trading at fresh multi-week lows near 92.10.

Earlier in the day, the data published by the US Department of Labor showed that the Initial Jobless Claims rose by 744,000 in the week ending April 3. This reading came in worse than the market expectation of 680,000 and put additional weight on the USD's shoulders.

Later in the session, St. Louis Fed President James Bullard, Minneapolis Fed President Neel Kashkari and FOMC Chairman Jerome Powell are scheduled to deliver speeches. Nevertheless, investors are likely to remain focused on the movements of the US T-bond yields and the inverse correlation between gold prices and yields is expected to remain the primary catalyst.

Gold technical outlook

On the daily chart, the Relative Strength Index (RSI) indicator continues to edge higher and remains well below 70, suggesting that gold has more room on the upside before becoming technically overbought.

The next target could be seen at $1,762, where the 50-day SMA is located. Gold has been moving below that dynamic resistance since late January and a decisive move above that level could attract more buyers and pave the way for additional gains toward $1,775 (previous support). 

On the other hand, $1,745 (previous resistance) now aligns as the first support. A daily close below that level could discourage bulls and allow for a deeper downward correction toward $1,730 (20-day SMA) ahead of $1,720  (lower limit of the latest horizontal channel).

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