Gold Price Forecast: XAU/USD retains $1,900 as bulls hold the grip

XAU/USD Current price: $1,914.10

• Financial markets eye global government bond yields for direction.
• Inflation figures will likely shed light on the world’s economic health this week.
• XAU/USD retreats from a fresh nine-month high, retains its bullish bias.

Spot gold rallied on Monday to $1,928,93 a troy ounce, its highest since April 2022, as the market optimism weighed on the US Dollar. The Greenback trimmed early losses and stabilized around its opening levels across the FX board, with XAU/USD hovering around $1,914. It is worth noting that the United States celebrates the Martin L. King holiday, which means most local markets are closed.

Asian stock markets closed mixed after a strong start to the day, undermining the positive mood. The main focus was on Japan Government Bonds (JGBs) as the yield on the 10-year note surged to 0.52%, pushing the upper end of the BoJ’s range. The Bank of Japan is having a monetary policy meeting this week, and rising yields spurred speculation policymakers will finally introduce a shift in their monetary policy. Governor Haruhiko Kuroda’s term ends next April, and speculative interest believes he will introduce changes to the ultra-loose policy before leaving.

Other than that, investors will be paying attention to global inflation figures this week, as the United Kingdom, the Euro Zone, Germany and Canada will post updates on price pressures. The United States macroeconomic calendar will remain scarce, with Retail Sales being the most relevant release.

XAU/USD price short-term technical outlook

The daily chart for the XAU/USD pair shows that technical indicators are barely retreating from extreme overbought readings, far from confirming an interim top. In fact, the Relative Strength Index (RSI) hovers around 72, somehow suggesting bulls are not willing to give up. At the same time, the pair is developing far above its moving averages, with the 20 Simple Moving Average (SMA) heading firmly north and providing dynamic support at around $1,840.40.

The 4-hour chart shows that bulls retain control of the pair. Technical indicators turned flat within positive levels after correcting extreme overbought readings, reflecting the absence of selling interest. At the same time, moving averages head firmly north, far below the current level, with the 20 SMA currently at around $1,899.70.

Support levels: 1,910.80 1,899.70 1,884.60

Resistance levels: 1,919.30 1,930.00 1,941.85

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