Gold Price Forecast: XAU/USD steady around $1,780.00 capped by high US T-bond yields

On Thursday, gold (XAU/USD) seesawed around $1,767-88, subject to the movement in US T-bond yields. As the Asian session begins, the non-yielding metal is barely up 0.08%, trading at $1,783.50 during the day at the time of writing. During the New York session, the market sentiment improved as the Wall Street close approached, ending with a positive mood; however, as the Asian session opened, conditions have worsened, as portrayed by falling equity futures.

Based on the abovementioned, factors like inflation, mentioned by most central bank policymakers around the globe, dented the market sentiment as it remains the main narrative for the day. Throughout the week, robust US corporate earnings kept up investors’ spirits, despite higher CPI reading like in New Zealand, which boosted the antipodean currencies against the greenback. On the softer tone was the UK inflation figure, which trailed the estimated by analysts.

The consequence of elevated prices spurred a sell-off in the bond market as bond yields rose. In the case of the US, the 10-year benchmark note rate rose to 1.68% on Thursday, the highest level since the 1.78% March high, which reflects investors confidence that the Federal Reserve will need to hike rates soon, to curb inflation. That jump in the US yield capped gold upside move in its attempt towards $1,800.00.

XAU/USD Price Forecast: Technical outlook

The 1-hour chart depicts that gold (XAU/USD) has been up and down, failing to challenge the $1,800.00 level. At press time, it is trading above the hourly moving averages (HMA’s), indicating an upside bias, but the slope of the before mentioned is flat, so the non-yielding metal is range-bound. 

The Relative Strength Index (RSI), a momentum indicator, is at 52 with a downward slope, but it supports the upward trend as it remains above the 50-midline.

Gold (XAU/USD) buyers will need a break of the $1,790.00 level to challenge $1,800.00. In case of that outcome, key resistance levels would be exposed. The first one would be the September 14 swing highs around $1,808.50, followed by the September 7 swing highs around $1,827.00.