Gold Price Forecast: XAU/USD rebound aims $1,880 amid geopolitics, Fed-linked anxiety

• Gold prices edge higher after refreshing eight-month top, recent recovery eyes important resistance.
• Risk appetite remains fragile amid indecision over Russia-Ukraine, Fed.
• Yields curve steepens, equities closed mixed and DXY weakened.
• Gold Price Forecast: Resuming the advance ahead of FOMC Minutes

Gold (XAU/USD) prices keep the previous day’s rebound from a weekly low to around $1,870 during the initial Asian session on Thursday.

In doing so, the yellow metal benefits from the market’s uncertainty over the de-escalation of Russia-Ukraine tension and the pace of the Fed’s March rate hike.

Softer comments from Moscow seem to ease the tension surrounding the invasion of Ukraine. However, the West and some of the Ukrainian sources reject the Russian troops’ retreat. On the other hand, the latest update from an Estonian diplomat suggests that Russia moves more military battalions towards the area near Ukraine and has also built a road and working on a bridge to soften the transport.

On other hand, the Federal Open Market Committee (FOMC) Minutes showed the hawkish concerns among the board members even if marking no strong support for a 0.50% rate hike in March. “Federal Reserve officials agreed last month that it was time to tighten monetary policy, but also that decisions would depend on a meeting-by-meeting analysis of data, according to minutes of the most recent policy meeting,” reported Reuters.

Talking about the data, US Retail Sales and Industrial Production rose notably beyond the market forecasts and previous readouts with the latest MoM figures of 3.8% and 1.4% respectively in January.

Amid mixed concerns, Wall Street failed to keep the previous day’s gains, closing mixed by the day’s end, whereas the US 10-year Treasury yields grind higher around multi-day tops, down 0.5 basis points (bps) to 2.04% at the latest. Further, the US Dollar Index (DXY) dropped for the last two days to refresh the weekly low.

Moving on, the second-tier US economics, mainly the housing market numbers, jobless claims and Philadelphia Fed Manufacturing Survey, may entertain gold traders. However, major attention will be given to the key risk catalysts, namely the Russia-Ukraine update and Fed-linked chatters.

Read: Fat or flat: Gold price in 2022

Technical analysis

Gold prices eased earlier in the week on RSI divergence and failure to offer a decisive close beyond November 2021 high.

However, the metal’s inability to conquer the January month high of $1,853 during the declines joins firmer MACD signals to redirect gold buyers towards the $1,880 key hurdle.

Should the quote cross the $1,880 resistance, the $1,900 threshold and late 2021 peak of $1,917 will return to the chart.

Alternatively, an upward sloping trend line from February 03, near $1,840, will act as an extra filter to the south even if the gold sellers manage to break January’s peak surrounding $1,853.

It’s worth noting that the 200-DMA and a two-month-long support line, close to $1,807 and $1,797 in that order, act as additional downside filters to challenge the gold bears.

Overall, gold is likely to grind higher but the buyers have a bumpy road to the north.

Gold: Daily chart

Trend: Further recovery expected