Gold Price Analysis: XAU/USD remains within recent $1920-$1935ish ranges despite hawkish ECB, Fed minutes

• Gold has remained within recent ranges in the $1920-$1935 area despite recent hawkish ECB and Fed minutes.
• Geopolitics remains in focus and supportive, but rising global yields could send XAU/USD lower towards $1900. 

Spot gold (XAU/USD) prices continue to chop within recent ranges and, thus far on Thursday have largely stuck within $1920-$1935ish bounds, having largely ignored the recent release of surprisingly hawkish ECB meeting minutes and mixed US weekly jobless claims figures. Upside potential, for now, remains capped by the presence of weekly highs and the 21-Day Moving Average in the $1940 area, while recent lows in the mid-$1910s continue to offer support ahead of the 50DMA just below at $1906.

The hawkish ECB minutes, which showed policymakers becoming increasingly uneasy with the bank’s current ultra-easy stance in the face of high inflation, come on the back of Wednesday’s even more hawkish Fed minutes. These showed that a large number of the bank’s members were chomping at the bit for a 50 bps rate hike at the most recent meeting, only to be deterred by Russia’s invasion of Ukraine.

As a result, it's not too surprising to see that bond yields in both the US and Europe are moving higher again this Thursday and this could weigh on gold prices and push it back towards weekly lows in the mid-$1910s. Higher yields raise the “opportunity cost” of holding non-yielding assets. Of course, geopolitics remains in focus and stagflation risks are rising as the US and EU further toughen sanctions, though the EU isn’t yet banning Russian oil and gas imports.

But in the absence of fresh alarming geopolitical developments and against the backdrop of hawkish central bank-driven upside in global bonds, a bearish break in XAU/USD seems more likely than an upside push. Gold bears continue to eye recent lows under $1900 as a potential target.