Gold Price Forecast: XAUUSD extends recovery, how high can it go?

Gold Price rallied after Wall Street’s opening to a fresh weekly high of $1,965.74 a troy ounce, following headlines indicating that the US alongside the G7 announced that any gold transaction involving Russia's central bank is subject to existing sanctions, according to a US Senior Administration Official. At the time being, XAUUSD retains most of its intraday gains and hovers near the mentioned high, suggesting that bulls have recovered control of the bright metal, regardless of an uptick in sentiment.

Meanwhile, US stocks picked up, extending intraday gains on hopes for a diplomatic solution in the Eastern Europe crisis. Headlines hinted at progress in ceasefire talks coming from Ukraine President’s aide Andriy Yemrk, who expressed a careful optimism. On the other hand, Western nations continue to pile up sanctions on Moscow. 

Earlier in the day, a sour market mood boosted demand for XAUUSD amid headlines coming from the war front. US President Joe Biden has met with other European leaders to discuss the situation, and, alongside NATO, are preparing for a risk of Moscow launching a nuclear attack. They have also discussed assisting Ukraine with anti-ship missiles. 

The sentiment improved a bit on headlines signaling they would announce a major initiative to direct shipments of liquefied natural gas to Europe, to replace that usually coming from sanctioned Russia. 

Also read: XAUUSD price moves: A consequence of conflict or/and interest rate increases?

Gold Price Technical Outlook

Gold Price is now comfortably trading above the 38.2% retracement of the 1,799.38/2,070.50 rally at around $1,960.00. The bright metal is up for a second consecutive day, currently crossing above a mildly bullish 20 DMA. Technical indicators in the daily chart fall short of confirming a bullish continuation, as the Momentum heads lower within neutral levels, while the RSI indicator is stable at around 55.

XAUUSD turned bullish in the near term, and according to the 4-hour chart, which shows that the price is challenging bears’ determination around the 100 SMA, while the 20 SMA picks up below the current level.

Now that the $1,960 level has been cleared, the next relevant resistance level for Gold Price is $1,970.03, March 10 daily low, followed by the $1,992.00 price zone. Support levels are at the daily low of $1,937.33, and the next Fibonacci support is at $1,925.20.