Gold Price Forecast: XAUUSD eyes $1,931, as US real yields turn positive for first time since 2020

Gold Price hit the lowest level in five days at $1,944, as it extended its correction from six-week highs of $1,998 reached earlier this week. The relentless surge in the US Treasury yields on heightening expectations of faster Fed rate increases smashed the non-interest-bearing XAUUSD. The 10-year benchmark yields clocked over three-year highs of 2.95% while the real rates turned positive for the first time since 2020. The hawkish comments from Chicago Fed President Charles Evans, as he sees the year-end rates at 2.25%-2.5%, and then likely higher, added to the aggressive Fed’s tightening bets.

Meanwhile, the upbeat tone in the yields combined with the unstoppable USD/JPY upsurge drove the US dollar to a fresh two-year top against its main rivals, collaborating with the downfall in Gold Price. The US stocks rally on a strong start to the earnings season exacerbated the pain in the bright metal.

Gold Price is looking to extend the previous sell-off on Wednesday, despite the retreat in the US dollar and the yields. Risk sentiment remains in a weak spot, as of writing, and should it worsen going forward, the US dollar is likely to see the renewed safe-haven demand, which could prompt the yellow metal to resume the downside. Concerns over the Ukraine crisis and global recession, in the face of elevated inflation and hawkish central banks, are likely to keep investors on the edge.

Gold Price awaits the Fed’s Beige Book for fresh insights on the world’s most powerful central bank’s policy normalization plans. Speeches from Fed officials will be also closely followed ahead of Chair Jerome Powell’s appearance at the IMF event on Thursday.

Gold Price Chart: Daily chart

Gold’s daily chart shows that the price is testing the critical 21-Daily Moving Average (DMA) at $1,944. A sustained break below the latter is needed to extend the correction towards the ascending 50-DMA at $1,931. Failure to resist above the latter could open floors towards the April lows of $1,915.

The 14-day Relative Strength Index (RSI) is gravitating around the midline, unable to offer a clear directional view, at this moment.

On the flip side, the $1,950 psychological barrier could challenge the road to recovery in XAUUSD. Friday’s low of $1,961 could offer stiff resistance if the recovery sustains. Acceptance above that barrier could revive hopes for another upswing towards the key $2,000 level.