Gold Price Forecast: XAU/USD rises toward $1840s despite renewed Fed hawkish comments, US inflation data

• Gold price stages a recovery, reclaiming the $1840 area as it aims north.
• Last week’s US economic data and hawkish commentary continue to dampen market sentiment.
• Gold Price Forecast: It will face the 50-DMA as resistance, followed by the 20-DMA; otherwise, it could fall to $1800.

Gold price advances after hitting a six-week low at around $1819 and aims toward the 50-day Exponential Moving Average (EMA), above its opening price by 0.30%. At the time of writing, the XAU/USD is at $1845.82, bolstered by a soft US Dollar (USD) undermined by falling US Treasury bond yields.

Gold climbs to the $1840 mark on a US holiday

As the North American session begins, US equity futures are trading in the red, except for the Dow Jones. Monday’s trading session would be dull due to thin liquidity conditions, as the US remains a holiday in observance of President’s Day.

Last week’s economic data revealed in the United States (US) keeps traders nervous, as they had begun to price in a more aggressive Fed. Uncertainty of where the Federal Funds Rate (FFR) will peak triggered the second consecutive week in which US equities finished with losses. In addition, Fed Governor Bowman and Christopher Waller were the latest policymakers to emphasize the need to raise higher rates for longer as the US central bank battles to tame inflation.

Last Tuesday, the US economic calendar revealed that the Consumer Price Index (CPI) slowed faster than estimated. However, two days later, prices paid by producers, also known as PPI, came above estimates and the prior’s month data in the month-over-month figure, reigniting speculations that the Fed would continue to tighten monetary policy as rate cuts speculations begin to fade.

Reflection of this was the jump in US Treasury bond yields, which closed the last week at 3.822%, eight basis points (bps) above the previous week and underpinned the greenback. The US Dollar Index (DXY), a gauge of the buck’s value vs. a basket of six currencies, climbed above the 104.000 mark. Nevertheless, in the session, the DXY it’s sliding 0.03%, at 103.849.

What to watch?

The US economic docket will feature in the week Existing Home Sales, S&P Global PMIs on its final readings, the Fed’s preferred gauge for inflation, the core PCE and the University of Michigan (UoM) Consumer Sentiment.

Gold technical analysis

From a technical perspective, the XAU/USD jumped from the 100-day EMA at $1820 and climbed above the $1840 area as buyers prepared to assault the 50-day EMA at $1854.08. On the upside, the XAU/USD first resistance would be the 50-day EMA, followed by the 20-day EMA at $1868.83, ahead of the February 9 daily high at $1890.21. Downwards, the XAU/USD first support would be the 100-day EMA, followed by the 200-day EMA at $1802.46, ahead of $1800.