XAUUSD NEWS : Gold Price Forecast XAUUSD surpasses $1,930 on subdued DXY, Russia-Ukraine peace talks eyed
- Gold prices snapped three-day downtrend to bounce off 13-day low before the bulls took a breather.
- Russia-Ukraine talks continue even if a 15-point peace plan challenges the progress.
- Fed’s rate-hike could only stop the gold buyers but not beat them.
- Bull cross on MACD, clear bounce off 200-SMA and weekly resistance breakout keep gold buyers hopeful.
XAUUSD NEWS : Gold XAU/USD has resumed rallying higher after a minor pause around $1,930 as investors have started pouring funds into the precious metal amid subdued performance by the US dollar index (DXY). Seven out of eight Fed members voted for a 25 bps rate hike. Moreover, the Fed announced seven rate hikes for 2022. An interest rate hike by 25 basis points (bps) may be preferred by the risk-sensitive assets and yellow metal but the DXY has strongly disliked the already announced quarter to the percent interest rate elevation.
To curtail the inflation mess, the street was expecting a 50 bps rate hike but Fed Chair Jerome Powell and his colleagues have preferred to raise interest rates gradually, which has underpinned the precious metal against the greenback. After the hangover of the Fed’s monetary policy, investors are waiting for more developments over the Russia-Ukraine war. The dictations from the leaders of both nations are aiming for a ceasefire after a three-week-long military activity in Ukraine. Any negative development post the negotiations may strengthen the gold prices further.
Gold (XAU/USD) pauses the recovery moves from a fortnight low, marked the previous day, as it takes rounds to $1,925-30 during Thursday’s initial Asian session. The yellow metal’s latest inaction could be linked to the market’s doubts over the Ukraine- Russia peace, as well as a reassessment of Fed’s hawkish rate-hike that couldn’t entertain the yellow metal traders much.
XAUUSD NEWS : The talks of a diplomatic compromise between Russia and Ukraine initially triggered the risk-on mood during Wednesday’s North American session before news suggesting a deadlock on the proposed neutrality of Kyiv. Also, Russia is ordered by the International Court of Justice in The Hague to suspend the invasion of Ukraine, which in turn may raise barriers for successful talks. Recently, Ukrainian President Volodymyr Zelenskyy hoped for the allies’ assistance on control of air traffic for Russian military planes.
It should, however, be noted that the US Federal Reserve’s (Fed) 0.25% rate hike and expectations of seven more such rate lifts during 2022, coupled with upwardly revised inflation forecast, challenge the risk-on mood.
Amid these plays, Wall Street marked another positive day whereas the US 10-year Treasury yields refreshed the highest levels in two years before retreating to 2.172% at the latest.
XAUUSD NEWS : Moving on, gold traders will pay major attention to the headlines from China and Ukraine for fresh directions.
Technical analysis
Gold prices hold onto the previous day’s rebound from the 200-SMA, as well as break of the one-week-old descending trend line, to keep buyers hopeful.
Also favoring the bullish bias is the MACD line that teases a bull cross over the signal line and the RSI that recovers from oversold territory.
That said, gold buyers presently eye 100-SMA level near $1,950 before the previous support line from early February, close to $1,962 by the press time, will challenge the XAU/USD upside.
In a case where gold rises past $1,962, a three-week-old horizontal area surrounding $1,970-75 will act as the last defense for bulls.
On the contrary, the previous resistance line from March 08 and the 200-SMA, around $1,912 and $1,897 in that order, will challenge the short-term downside of gold.
Should the yellow metal drop below $1,897, the odds of witnessing further downside towards the mid-February high near $1,880 can’t be ruled out.
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