Gold Price Forecast: XAU/USD remains side-lined around $1,900 amid Ukraine standoff

Update: Gold price is pivoting around $1,900, lacking a clear directional bias this Wednesday, as investors rethink the geopolitical risks surrounding the Ukraine standoff, especially after the Western sanctions imposed on Russia a day before. Meanwhile, the US Treasury yields hold the recent advance, offsetting the safe-haven demand for the metal, keeping the price more or less in a $5 narrow range. A relatively data-light week also offers little for gold traders while geopolitics stays in the spotlight. Meanwhile, aggressive Fed rate hike expectations are back on the table amid resurfacing worries over inflation, as the Russia-Ukraine crisis nudge energy prices higher. Looking ahead, the geopolitical updates surrounding the Russia-Ukraine turmoil will continue impacting the bright metal.

Read: Gold Price Forecast: Ukraine in the eye of the storm, fears boost safe-haven assets

Spot gold (XAU/USD) remains mildly offered around $1,900 during Wednesday’s Asian session, following the U-turn from the highest levels since June 2021 flashed the previous day.

The yellow metal’s recent inaction could be linked to the absence of Japanese traders, which indirectly affects US bond demand in Asia and restricts catalysts for gold. Also testing the gold traders are recently mixed concerns over the Fed’s next performance and cautious mood over Russia-Ukraine conditions as the West gets aggressive in sanctioning Moscow.

Recently receding odds of a diplomatic solution to the Russia-Ukraine tussles offered the latest blow to the market’s risk appetite, as well as favor gold buyers, as the US ruled out the scope of a summit between US President Joe Biden and his Russian counterpart Vladimir Putin. On the same line were comments from US Secretary of State Antony Blinken’s rejection of the need for Thursday’s meeting with Russian Foreign Minister Sergei Lavrov.

On the contrary, US President Biden’s comments like, “We have no intention of fighting Russia,” seem to have played the role of turning down the fears of a full-fledged war between the West and Moscow.

Elsewhere, Dr. Raphael W. Bostic, Chief Executive Officer of the Federal Reserve Bank of Atlanta, said, “Fed is going to "let the data guide us" in upcoming decisions.” The policymaker’s comments were in line with Monday’s statements from Federal Reserve Board Governor Michelle Bowman who mentioned, “It is too soon to tell if the Fed should hike 25 or 50bps in March.”

Against this backdrop, S&P 500 Futures consolidate recent losses with 0.5% intraday gains while the US Treasury yields remain inactive at around 1.94% after rising around 2.0% daily in the previous day.

Moving on, Fedspeak and geopolitical can keep the driver’s seat but the sluggish markets may allow gold to pare some of the latest gains.

Technical analysis

Overbought RSI joined a 17-month-old resistance line to trigger gold’s pullback from multi-day high on Tuesday.

Even so, the metal remains above November 2021 peak, as well as backed by a 13-day-old support line near $1,877, which in turn keeps gold buyers hopeful of overcoming the immediate hurdle surrounding $1,910. Also acting as an upside filter is November 2021 top surrounding $1,917.

Gold: Daily chart

Meanwhile, a convergence of the previous resistance line from January 20 joins an upward sloping trend line from February 11 to highlight $1,890 as the immediate key support.

Following that, 50-DMA and a three-week-long rising trend line, respectively near $1,872 and $1,857, will lure the gold sellers before confirming their dominance.

Gold: Four-hour chart