Gold Price Forecast: XAU/USD stays defensive above $1,920 support as US Dollar steadies ahead of Fed, NFP

• Gold price bounces off intraday low but stays directionless after closely missing the bear’s entry in the week.
• China’s return boosts Asia-Pacific shares, S&P 500 Futures bear the burden of firmer yields.
• XAU/USD bulls appear running out of steam even as Fed’s dovish hike, downbeat expectations from US NFP probe bears.

Gold price (XAU/USD) aptly portrays the market’s cautious mood ahead of top-tier data/events during early Monday.

The metal rose in the last six weeks before losing the upside momentum at the latest. The reason for the quote’s recent sluggish moves could be linked to the market’s indecision as major central bank events and the US jobs report occupy the weekly economic calendar.

It’s worth noting that China’s return from the one-week-long Lunar New Year (LNY) holidays bring some good news as the nation’s Center for Disease Control and Prevention (CDC) signaled the end of the Covid wave. On the same line could be the could jump in the Chinese festive demand, of around 12.2% versus the year ago, as well as readiness to bolster economic growth via lending tools, spending and higher imports.

Elsewhere, mixed concerns surrounding the US inflation and growth challenge the Federal Reserve (Fed) in defending its hawkish policy, which in turn keeps the Gold buyers hopeful. Furthermore, the European Central Bank’s (ECB) comparatively more hawkish stand probes the US Dollar’s latest rebound and hence exerts downside pressure on the XAU/USD.

Amid these plays, the US Treasury bond yields grind higher but the stock futures print mild losses. Furthermore, the Asia-Pacific shares grind higher but the US Dollar Index (DXY) struggles to extend a two-day recovery.

Looking forward, January’s official PMIs from China, up for publishing on Tuesday, could offer immediate directions to Gold price ahead of Wednesday’s Fed meeting and Friday’s US jobs report. Overall, the Fed’s inability to convince hawks could weigh on the pair.

Gold price technical analysis

Gold price fades the previous day’s bounce off a one-month-old ascending support line, taking rounds to the 50-Simple Moving Average (SMA) level surrounding $1,928 by the press time.

Although the receding bearish bias of the MACD and multiple bounces off the aforementioned support line defends the XAU/USD buyers. Steady RSI (14) and recently sluggish momentum teases Gold sellers of late.

That said, a clear downside break of the stated support line, close to $1,920 by the press time, appears necessary for the Gold sellers to take entry.

Following that, the $1,900 threshold and the January 18 swing low near $1,896 could lure the XAU/USD bears.

Alternatively, Gold buyers need to cross the one-week-old horizontal hurdle of around $1,945 to retake control.

Gold price: Four-hour chart

Trend: Further weakness expected