Gold Price Forecast: XAU/USD rallies above $1860 as US intelligence report Russia could invade Ukraine next week

• Geopolitical developments sent the yellow metal skyrocketing above $1,860.
• XAU/USD threatens to break a nine-month-old downslope trendline around $1,850-60.

Gold (XAU/USD) approaches the weekend on the right foot, up 2.36% in the week at press time. At the time of writing, XAU/USD is trading at $1,850. Since around 18:30 GMT, geopolitical developments concerning the Ukraine – Russia conflicts spurred a jump of $20 since 18:35GMT from $1,840 to $1,860.

According to a PBS NewsHour reporter, “the US believes that Russian President Vladimir Putin has decided to invade Ukraine and already communicated those plans to the Russian military. Two Biden administration officials said they expect the invasion to begin as soon as next week.”

The reporter continued “that US defense officials anticipate a “horrific, bloody campaign” that begins with two days of bombardment and electronic warfare, followed by an invasion, with the possible goal of regime change. Reportedly, the North Atlantic Council was briefed on the new intel today.”

Putting this aside, the financial market mood is dismal, as US equities trade in the red, while the greenback underpinned by US Treasury yields up, climbs 0.28%, at 95.85. 

Friday’s US economic docket was light in the North American session. The University of Michigan Consumer Sentiment Index for February came at 61.7, lower than the 67.5 estimated and trailed the January 67.2 figure. Concerning inflation expectations for 1 and 5 years, consumers expect it at 5.0% and 3.1%, respectively. 

On Thursday, the St. Louis Fed President, James Bullard, on an interview with Bloomberg, said that he favors 1% of rate increases to the Federal Funds Rate (FFR) by July 1st. When asked about a 50 bps increase in the March meeting, he said he does not want to “prejudge that meeting.”

XAU/USD Price Forecast: Technical outlook

The XAU/USD is neutral biased, but geopolitical issues sent the yellow-metal surging towards a nine-month-old downslope trendline, around $1850-60 region, which, if it gives way, would expose the November 16th, 2021 high at $1,877, followed by June 1st, 2021 daily high at $1,916.61.