|

Gold Price Forecast: XAU/USD retreats from $1950 on US dollar strength, high US yields

  • Gold slumps for the third day of the week amid an upbeat market mood and rising US yields.
  • The 2s-10s yield curve inverted for the second time in the week as investors expect the US economy will slow down.
  • Mixed US economic data was mainly ignored by XAU/USD traders.
  • XAU/USD Price Forecast: In consolidation within the $1900-50 range.

Gold (XAU/USD) slides as the second quarter begins, down some 0.64% in the North American session. The Russia-Ukraine tussles, elevated global inflation, and rising US Treasury yields, keeping the non-yielding metal pressured. Nevertheless, an inversion in the 2s-10s yield curve is worth noting as investors assess the outcome for the yellow metal. At press time, XAU/USD is trading at $1924.46 a troy ounce.

Upbeat market sentiment and positive US economic data weighed on gold

US equities fluctuate as Wall Street is about to close; meanwhile, European bourses finished positive. The Russia-Ukraine war extends as peace talks over the last couple of weeks have failed to offer a diplomatic exit to the war. Furthermore, Russia’s President Vladimir Putin puts pressure on Europe after signing a decree that non-friendly countries need to pay in roubles for natural gas.

That triggered a raft of negative market moods on Thursday, which lifted gold towards $1950. Nonetheless, positive US economic data weighed on gold prices.

The US economic docket featured March’s Nonfarm Payrolls report, which came at 431K jobs created, lower than the 490K estimated by analysts. Even though it was slightly softer than expected, forecasts ranged from 0 to 700K, so the market perceived it as a robust report. Moreover, the Unemployment rate in March dropped to 3.6% from 3.8% YoY in and beat the 3.7% estimations.

Later the US ISM Manufacturing PMI, a leading indicator for the industry, fell to 57.1 in March from 58.6 in February, well below the 59 estimations by analysts.

Meanwhile, the US Dollar Index, a gauge of the greenback’s value against a basket of its rivals, rose 0.22%, sitting at 98.566, underpinned by US Treasury yields. The US 10-year benchmark note surges four basis points at 2.371%.

XAU/USD Price Forecast: Technica outlook

XAU/USD is trading within the $1910-50 range for thirteen consecutive days, consolidated and with a lack of direction. The Relative Strength Index (RSI), a momentum indicator, has been seesawing around the 50-midline but on Friday turned bearish at 48.71. However, the daily moving averages (DMAs) below the spot price depict an upward bias, but contradictory signals recommended to wait for a fresh catalyst.

Upwards, XAU/USD’s first resistance would be March 1 daily high at $1950.30. Breach of the latter would expose March 24 daily high at $1966.20, followed by $2000.

On the flip side, the XAU/USD first support would be $1910. A clear break would expose the 50-day moving average (DMA) at $1898.11, followed by November 16, 2021, daily high at $1877.14, followed by the 200-DMA at $1820.63.

XAU/USD

Overview
Today last price1923.86
Today Daily Change-13.58
Today Daily Change %-0.70
Today daily open1937.44
 
Trends
Daily SMA201953.9
Daily SMA501896.14
Daily SMA1001851.31
Daily SMA2001820.02
 
Levels
Previous Daily High1949.89
Previous Daily Low1919.3
Previous Weekly High1966.18
Previous Weekly Low1910.83
Previous Monthly High2070.54
Previous Monthly Low1890.21
Daily Fibonacci 38.2%1938.2
Daily Fibonacci 61.8%1930.99
Daily Pivot Point S11921.2
Daily Pivot Point S21904.95
Daily Pivot Point S31890.61
Daily Pivot Point R11951.79
Daily Pivot Point R21966.13
Daily Pivot Point R31982.38

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

More from Christian Borjon Valencia
Share:

Editor's Picks

AUD/USD holds rebound near 0.6900 on US-China trade optimism

AUD/USD holds the rebound near 0.6900 in the Asian session on Monday. Mixed China's inflation data for October fails to provide any inspiration to the Chinese proxy, the Australian Dollar, but China's extension of the suspension of 24% tariffs on US goods and reduced US-Iran tensions help the Aussie pair cling to recovery gains.

USD/JPY retreat in sync with USD, appraches 158.00

USD/JPY is back in the red at the start of the week on Monday, eyeing the broad US Dollar retreat amid easing US-Iran tensions. Traders also resorting to profit-taking following the blockbuster US Nonfarm Payrolls data-led rally. US CPI report is next in focus.

Gold climbs to two-day highs past $4,100

Gold resumes its recovery and surpasses the $4,100 mark per troy ounce at the beginning of the week. The yellow metal’s solid performance comes amid fresh downside pressure on the US Dollar, shrinking US Treasury yields and a marked retracement in crude oil prices.

Crypto Today: Bitcoin, Ethereum, and Ripple extend downtrend as selling pressure mounts

Major cryptocurrencies, including Bitcoin, Ethereum, and Ripple, maintain a broadly corrective tone, extending losses from the previous week. Risk-off sentiment builds in the crypto market following last week’s correction linked to Democrats sweeping the US midterms.

Two Huangs don’t make a right: Nvidia CEO caught in scandal – NVDA slides

Nvidia CEO Jensen Huang sent employees an apology for being unfaithful to his wife, following reports that he may have been targeted in a foreign intelligence operation. Why is Nvidia trading roughly 5–6% below Friday’s close in the overnight market? And – more importantly – does this actually matter to the AI trade?

Gold reclaimed $4,100. Tuesday’s CPI test decides if it holds
Gold (XAU/USD) starts the week on a positive note, reclaiming the $4,100 psychological level as the US Dollar (USD) retreats from its recent highs. The precious metal recovers from Friday's losses, although investors remain cautious ahead of Tuesday's US Consumer Price Index (CPI) report, which could determine the next direction for Bullion.