Gold Price Forecast: XAUUSD buyers seize control in the NFP week, $1,870 in sight

Gold Price ended Friday with mild gains above $1,850 while having booked the second straight weekly gains, as the US dollar correction extended alongside the US Treasury yields’ amid subsiding aggressive Fed tightening expectations. This came after a slew of disappointing US economic data last week suggested that the world’s largest economy is losing momentum. Against this backdrop, “money markets have reduced their pricing for additional Fed rate rises by end-2022 from 193bps to 180bps. This though still implies rate rises at every remaining Fed meeting of 2022, including 50bps hikes in both June and July and at least 25bps at each of the remaining three, according to industry analysts.

A potential pause in the Fed’s aggressive rate hike track from September knocked down the US yields to the lowest level since mid-April, aiding the recovery attempts in the non-yielding gold price. The end-of-the-week flows also remained in play, helping gold recover ground after a two-day decline.

Starting out a new week on Monday, Gold Price is looking to build onto the previous gains, as the dollar and the yields continue holding the lower ground. The sentiment around the Fed, the Ukraine crisis, as well as, China reopening news will remain in play, as the Memorial Day holiday in the US could make for a thin session ahead of the end of the month. The German Preliminary inflation data could entertain traders amid a quiet start to the US Nonfarm Payrolls week.

Gold Price Chart: Daily chart

Having found strong buyers once again at the bearish 21-Daily Moving Average (DMA), now at $1,849, gold price is looking for a retest of the previous week’s high of $1,870.

The next upside target awaits at the mildly bullish 100-DMA at $1,890, above which the $1,900 will act as powerful resistance.

The 14-day Relative Strength Index (RSI) is closing in on the midline, still remains below the latter, suggesting that the bullish potential may be limited.

Alternatively, a firm break below the 21-DMA will challenge the bullish commitments at the critical 200-DMA, currently pegged at $1,842.

Failure to resist the latter will reinforce the selling interest, opening floors for a fresh downswing towards the May 18 low of $1,807.