Gold Price Forecast: XAUUSD gives up gains and losses $2,000

• Easing Ukraine-Russia tensions weighed on the XAUUSD demand.
• Gold Price corrected extreme overbought conditions, but bulls defend the downside.
• European indexes trade in the green, supporting Wall Street's futures.

Gold Price retreated sharply from $2,070.50 a troy ounce, now trading in the $1,990 price zone, as fears about an escalation in the Ukraine-Russia crisis eased. The market sentiment began improving on Tuesday as humanitarian corridors to evacuate civilians were put in place. And while the UK and the US announced bans on crude oil imports from Russia, the mood remained upbeat as Ukraine said it would not insist on NATO membership.

On Wednesday, the Russian Ministry of Foreign Affairs Sergei Lavrov said that, due to sanctions, Moscow is diminishing its usage of the US currency in reserves and international settlements, which somehow undermines demand for the greenback across the FX board, and prevents XAUUSD from falling further. Also, Russia said it's not trying to overthrow the Ukrainian government, adding to the temporarily positive sentiment.

European stocks trade firmly higher, weighing on the bright metal, which trimmed half of its weekly gains. Wall Street futures, in the meantime, are up and poised to advance for a second consecutive day. Gold Price has broken below the $2,000 threshold, as it seems bulls are finally giving up.

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XAUUSD Technical outlook

Gold Price is correcting extreme oversold conditions, and there are technical signs that the bullish potential would recede, as the bright metal stands below the 23.6% retracement of this year's rally at $2,001.00, now providing near-term term resistance. The 38.2% Fibonacci retracement of the same rally is at around $1,975, the ultimate support level, as once below it, the risk will skew to the downside.

A new bout of risk aversion could send XAUSUSD above 2,025, the immediate resistance level, which will open the door for a retest of the 2,070 price zone. The record high stands at 2,075.64, a level that the bright metal achieved in August 2020.