Gold Price Forecast: XAU/USD flirts with $1,850 support confluence, focus on Fed’s Powell, US NFP

Gold price (XAU/USD) remains mostly illiquid around $1,855 as traders brace for the key data/events during early Monday in Europe. Adding filters to the XAU/USD moves could be the mixed headlines from China, as well as the US Dollar’s inaction despite a pullback in the Treasury bond yields.

Starting with China, the National Development and Reform Commission of the People's Republic of China (NDRC) recently said, it “Will further release the potential for consumption,” while also adding that China's economy steadily improving, per Reuters. Earlier in the day, market sentiment turned sour after China’s annual session of the National People's Congress (NPC) appeared a grim event due to its growth target and geopolitical concerns.

Elsewhere, San Francisco Federal Reserve Bank President Mary Daly highlighted the importance of incoming data to determine how high the rates can go. Previously, Atlanta Fed President Raphael Bostic renewed concerns about the Fed’s policy pivot while Federal Reserve published a semi-annual Monetary Policy Report on Friday wherein it clearly said, “Ongoing increases in the Fed funds rate target are necessary.” The report also stated that the Fed is strongly committed to getting inflation back to 2%.

It should be noted that the US 10-year Treasury bond yields, rose to the highest levels since November 2022 in the last week before easing to 3.95% by the end of Friday, making rounds to the same level at the latest. More importantly, the US two-year bond coupons rose to the highest levels last seen in 2008 before retreating to 4.85% by the press time. That said, the S&P 500 Futures print mild gains, tracking Wall Street’s moves amid a light sluggish start to the key week, whereas the US Dollar Index (DXY) remains depressed around 104.45, down 0.05% intraday by the press time.

Moving ahead, Gold traders may witness further inaction in the market as traders remain cautious before the key events including Fed Chair Jerome Powell’s Testimony, China’s inflation data and Friday’s US jobs report for February.

Gold price technical analysis

Although the overbought RSI (14) challenges the Gold buyers around $1,855, a convergence of the 200-bar Exponential Moving Average (EMA) and bottom-line of a one-week-long bullish channel challenge the bears around $1,850.

It’s worth noting that the XAU/USD weakness past $1,850 could quickly drag the quote toward the mid-February swing low near $1,818, before highlighting the previous monthly trough surrounding $1,805 and the $1,800 threshold for the Gold bears.

Meanwhile, recovery moves may aim for the aforementioned channel’s top line, close to $1,878, ahead of targeting the February 09 swing high of $1,890.

In a case where the Gold buyers keep the reins past $1,890, the 61.8% Fibonacci retracement of the metal’s weakness marked in February, as well as the January 31 swing low, around the $1,900 psychological magnet can act as the last defense of the XAU/USD bears.

Overall, Gold price teases bears amid an inactive day at the start of an all-important week.

Gold price: Four-hour chart

Trend: Further upside expected