Gold Price Forecast: XAU/USD jumps off the 50-DMA and reclaims $1900 on negative sentiment

• The market sentiment turned sour as Moscow said there had been no “breakthrough” in talks.
• Global equities fall, commodities rise, and the greenback breaks under the 98.00 mark.
• XAU/USD Price Forecast: A hammer at the 50-DMA lifted the non-yielding metal above $1900.

Gold (XAU/USD) found some buying pressure around the $1900 mark, briefly broken on Wednesday amid an improvement in geopolitical developments in Eastern Europe, which dragged commodity prices down, with oil and silver recording losses, alongside the yellow-metal. At $1935.05, XAU/USD reflects the appetite for safe-haven assets, which in the FX space include the Japanese yen and the Swiss franc.

Moscow sees no “breakthrough” in peace talks with Ukraine

Meanwhile, reports from Moscow said that although Ukraine has begun to put demands down on paper and be more specific, they don’t see anything really promising that looks like a breakthrough and emphasized there’s a lot of work ahead. That said, the market sentiment shifted negatively, lifting the prices of commodities.

Global equities are dropping from weekly highs on the aforementioned, while the greenback is down. The US Dollar Index, a gauge of the buck’s measure vs. its peers, slides 0.64%, sits at 97.781, undermined by US Treasury yields down, with the 10-year benchmark note rate at 2.378%, down two basis points, though higher than the 2-year yield, which sits at 2.344%.

On Tuesday, the US 2 to 10-year yield curve briefly inverted when the 2-year exceeded the 10-year yield for the first time since 2019, reinforcing the view that the Federal Reserve tightening may cause a recession.

The US economic docket for Wednesday featured the US ADP Employment report for March, which showed that 455K jobs were added to the US economy, while the Department of Commerce reported that GDP for the Q4 in its Final reading came at 6.9%, a lower than the 7.1% estimated, but the highest since the Q3 of 2020.

Later, Richmond’s Federal Reserve President Thomas Barkin said that he would be open to a 50 bps hike in May “if necessary” and added that he would be looking at inflation and how strong the economy is. Barkin stated that it feels inflation will settle next year as the US central bank tightening moves take effect.

XAU/USD Price Forecast: Technical outlook

Gold’s Tuesday fall was stopped around the 50-day moving average (DMA) at $1894.43, in a downward move that looked like XAU/USD was going to get lower on positive news from Ukraine. However, once the market sentiment turned dismal, it printed a hammer, a bullish candlestick, that triggered Wednesday’s upward move, though downside risks remain unless XAU bulls reclaim the  $1950 mark.

XAU/USD’s first resistance is March 1 daily high at $1950.30. Once cleared, it would open the door for a retest of the all-time high at $2075.28, but it would find the $2000 mark as the first resistance.