Gold Price Forecast: XAUUSD finds an unexpected support

Gold Price picks up as US trades reach their desks, approaching a daily high of $1,936.04 a troy ounce. European indexes accelerated their decline, weighing on Wall Street, which has already trimmed most of its Tuesday’s gains.

 Meanwhile, US government bonds paused their slides at the beginning of the day, pushing yields temporarily lower and limiting XAUUSD upside. Nevertheless, the yield on the US 10-year Treasury yield hit a fresh multi-year high of 2.417%, now down to 2.35%.

In the absence of relevant macroeconomic figures, financial markets rotate around the Russia-Ukraine crisis. Crude oil prices are once again on the run, following some comments coming from Moscow. President Vladimir Putin said that they intent to use Russian rouble when selling gas to “non-friendly” countries, clarifying that they will respect their contracts on supply. The barrel of WTI is currently changing hands at $113.65, its highest in two weeks. Higher oil prices provide unexpected support to Gold Price. 

Also read: Gold attempts to rebound after testing key support

XAUUSD Technical Outlook

XAUUSD has spent the week hovering around a Fibonacci level, the 50% retracement of this year’s rally at $1,925.20. Movements away from the level have been shallow, although Gold Price bottomed the previous week near the next Fibonacci support level at $1,980.00, while intraday advances fell short of nearing the 38.2% retracement at $1,960.00. Market participants are looking for a clear break of any of those extremes for more sustained directional strength.

Technical readings in the daily chart suggest that Gold Price may come under further pressure, as it has been unable to move beyond a flat 20 DMA for over a week, meeting sellers around it. The same chart shows that technical indicators are directionless around their midlines, reflecting side-lined speculative interest.

From a fundamental perspective, however, XAUUSD has room to appreciate further and retest bears’ determination at around the $2,000 figure, while a break above the latter could result in a test of record highs in the $2,070 price zone.