Gold Price Forecast: XAU/USD pokes $1,820 hurdle as United States Treasury bond yields retreat

Gold price (XAU/USD) struggles to defend the week-start rebound around $1,817, flirting with a short-term technical resistance, as the metal traders await more clues amid month-end positioning. That said, the bullion buyers cheered a pullback in the United States Treasury bond yields and the US Dollar to portray an upbeat Monday despite looming geopolitical fears and the hawkish bias of the Federal Reserve (Fed) officials. The reason could be linked to the mixed US data and month-end moves.

Gold price rose on softer United States Treasury bond yields

On Monday, the United States Treasury bond yields paused a multi-week-old upward trajectory amid mixed US data and the market’s wait for stronger clues to confirm the hawkish Federal Reserve (Fed) bias.

That said, US Durable Goods Orders slumped -4.5% in January versus -4.0% expected and 5.1% prior. However, the Nondefense Capital Goods Orders ex Aircraft grew 0.8% versus 0.0% analysts’ expectations and -0.3% previous readings. On the same line, the US Pending Home Sales rallied 8.0% MoM versus 1.0% expected and 1.1% prior.

The data triggered the much-needed pullback in the US Treasury bond yields as the benchmark 10-year coupon dropped three basis points (bps) to 3.92% after a five-week uptrend while the two-year counterpart followed the suit by retreating from a three-month high to 4.78%.

Geopolitical fears, hawkish Federal Reserve concerns remain intact

Mixed United States data and a pullback in the Treasury bond yields seem to fail in conveying the market’s fears surrounding the Ukraine-Russia war, especially after China’s dual show of having ties with Russia and flaunting a 12-point peace place for Ukraine. On Monday, US National Security Advisor Jake Sullivan said on CNN’s “State of the Union,” China’s stance on the Russian invasion of Ukraine puts it in an “awkward” position internationally and any weapons support to Russia would come with “real costs.”

Elsewhere, Federal Reserve Governor Philip Jefferson said on Monday that it is important to get back to 2% inflation to allow those sorts of sustained economic gains.

Reuters also portrayed hawkish Fed concerns while saying, “Economic data this month reflected still tight jobs markets and inflation remaining sticky, leading Fed funds futures traders to bet on higher rates, which in the US are now seen peaking in September at 5.4%, up from 4.58% now.”

US Dollar pullback adds strength to XAU/USD rebound

US Dollar traces the retreat in the US Treasury bond yields and a month-end positioning to allow the US Dollar bulls to take a breather. It should be noted that the Wall Street benchmarks closed with mild gains but failed to impress the US Dollar traders.

That said, the US Dollar Index (DXY) snapped a four-day uptrend to retreat from the seven-week high, to 104.65 by the press time. The DXY pullback allowed the Gold price to print 0.35% intraday gains as it pokes the $1,820 hurdle.

Moving on, second-tier United States economics, like the Conference Board’s Consumer Confidence and some activity numbers from Chicago and Richmond Fed, could entertain the Gold traders. However, major attention will be given to the qualitative catalysts.

Gold price technical analysis

Gold price broke a four-day-old descending resistance line, now support around $1,809, to portray the first daily gain in six. The recovery moves currently jostle with a one-week-long support-turned-resistance of around $1,820.

Given the bullish signals from the Moving Average Convergence and Divergence (MACD) indicator and the upbeat but not overbought Relative Strength Index (RSI) line, placed at 14, the XAU/USD is likely to extend the latest rebound past the $1,820 hurdle.

However, a convergence of the 100-Hour Moving Average (HMA) and the aforementioned bearish channel’s upper line, close to $1,831, appears the key for the Gold buyers to cross before retaking control.

Alternatively, the downside break of the immediate resistance-turned-support line near $1,809 could quickly drag Gold price towards the $1,800 threshold.

Following that, the bearish channel’s bottom line, close to $1,790 at the latest, can challenge the XAU/USD bears.

Overall, Gold is likely to pare recent losses but the overall trend remains bearish.

Gold price: Hourly chart

Trend: Limited recovery expected