Gold Price Forecast: XAUUSD senses caution near $1,850 on impending bear cross

• Gold Price is erasing early gains, as the US Treasury yields turn positive.
• Risk-on flows dominate, with the US dollar reversing the post-NFP upside.
• Impending bear cross on the daily chart warrants caution for XAU bulls.

Gold Price is fading its early rebound towards $1,860, with bears now testing the $1,850 level amid mixed factors in play.

The Asian recovery in the bright metal was driven by a minor pullback in the US Treasury yields, as the dust settled over the upbeat US labor market report released on Friday. Soaring oil prices on Saudi Arabia’s price hike also underpinned the inflation-hedge gold.

Although, the yields are flipping back into the positive territory amid the return of risk flows, which dull the safe-haven appeal of the US government bonds. This, in turn, caps the renewed upside in the non-yielding gold. Markets assess the Fed tightening outlook amid a tighter labor market and potential peak inflation.

Meanwhile, the US dollar is feeling the pull of gravity amid reduced demand for safety, keeping the downside cushion in the metal, for now. To add, most of the major European markets are on a holiday, keeping the volatility high and gold traders on their toes.

All eyes remain on the Wall Street open for fresh cues on risk sentiment, as the US economic docket remains data-empty and the Fed policymaker enter the ‘blackout period’.

Gold Price: Daily chart

The bearish 50-Daily Moving Average (DMA) is set to cross the horizontal 100-DMA for the downside. If that happens, it will confirm a bear cross, reviving the selling interest in the metal.

With strong support at $1842, the confluence of the bearish 21-DMA and horizontal 200-DMA will be put at risk. Acceptance below the latter on a daily closing basis will call for a test of the previous week’s low of $1,829.

Also read: Gold Price Forecast: XAUUSD has room to recover before the next downswing kicks in

 If buyers manage to extend control, then a retest of the $1,860 level will be in the offing. The next significant bullish target is aligned at the end of May highs around $1,870.

Gold Price: Additional levels to consider