Geopolitical questions will continue to influence gold. Any risk-off market mood should be a benefit for precious metals.
A energy agreement between the US & EU would reduce Europe’s dependence on Russia’s natural gasoline.
XAU/USD price forecast: The trend is upwardly biased. However, failure to reclaim $1974 or a horizontal 200 DMA make gold vulnerable to selling.
The session will end Friday on a lower note for gold (XAU/USD), but the week recovered some of its brightness. It gained 1.79% after market sentiment fluctuated at the North American session’s close. XAU/USD was trading at $1958.36 per troy ounce as of the writing. This is a decrease of 0.19%.
Overnight, global equities reflected mixed market sentiments due to Russia’s invasion in Ukraine, high inflation and tightening by the central bank. While discussions between Russia, Ukraine gave rise to some progress in secondary issues, negotiations over the main issues are still stuck. The NATO summit is over, but the US and Eurozone have reached an agreement on natural gas supplies to reduce Russia’s dependence.
According to Bloomberg, Russia stated that it would concentrate its military efforts on securing complete control over Ukraine’s Dobnbass. This is a sign that Moscow might be rethinking its position in Ukraine.
The Federal Reserve’s hawkish pivot continues to weigh on the yellow metal. Jerome Powell Fed Chair, expressed his belief that the Fed will do everything necessary to restore “price stability”. He stated that, “[Fed] We will do so”
XAU/USD traders reacted immediately to the headline pushing the non-yielding to the weekly low of $1910 per troy ounce. Gold rose to $1950 after a slowed market and US Treasury yields sawsawing.
Friday’s US economic docket featured Pending Home Sales February. This was 4.1% lower than the expected 1% increase. The University of Michigan Consumer Sentiment Final March was 59.4 compared to 59.7 and inflation expectations remained at 5.4% vs 4.9% in the previous report.
XAU/USD Forecast: Technical outlook
Although gold (XAU/USD bias) is still up, it will remain under selling pressure. Unless XAU bulls make the aforementioned recovery, the precious metal will be exposed to selling pressure if it fails to reclaim the February 24th daily high of $1974. Notable is the fact that the 200-day moving mean (DMA) at $1816.85 is horizontal. This indicates that the steep rally above 2000 could be subject to further corrections.
XAU/USD would reach $1974 as its first resistance. The next resistance, $2000, would be cleared once the previous one has been removed. The YTD high is at $2075.82.
The most likely scenario is that XAU/USD would find its first support at $1950.30 on the other side. Brute of this would result in a March 16th daily low at $1895.06, followed closely by a November 16th 2021 low at $1877.14.
