Gold Price Forecast: XAU/USD bears approach $1,935 amid China’s covid woes, Ukraine concerns

• Gold prices remain pressured around one-week low, prints three-day downtrend.
• Market struggle for clear direction in Asia as yields stabilize around multi-month high, Ukraine flashes signals on peace with Russia.
• Coronavirus conditions worsen in China, Langfang city near Beijing is locked down.
• Gold and other havens retreat amid Russia and Ukraine negotiations

Gold (XAU/USD) renews intraday low around $1,942, down 0.45% on a day, as COVID-19 fears of China add to the yellow metal’s latest weakness during Tuesday’s Asian session. Also favoring the bears are the mixed concerns over the Russia-Ukraine crisis as well as firmer US Treasury yields amid hopes of faster monetary policy tightening by the Federal Reserve (Fed).

That said, the yellow metal began the trading week on a negative side amid firmer US dollar and indecision over the Ukraine-Russia stand-off.

Having marked the biggest daily jump in covid infections, the latest virus numbers from China didn’t provide any relief. “Mainland China reported 3,602 new confirmed coronavirus cases on March 14, the national health authority said on Tuesday, compared with 1,437 a day earlier,” said Reuters. The dragon nation also announced a virus-led lockdown in Langfang city which is near to Beijing.

Elsewhere, Sputnik quoted an Adviser to Ukraine President Volodymyr Zelenskyy’s office, Oleksiy Arestovych, to raise expectations of a Moscow-Kyiv peace as early as two weeks or before late May. On the same line were the latest comments from Ukraine President Zelenskyy who said that the peace talks with Russia will continue on Tuesday, following an abrupt pause on Monday. However, reports of a Russian drone over Poland and sanctions on Moscow, as well as Russia-Belarus rejection to pay energy supplies in the USD, challenge the mood and weigh on the gold prices.

Amid these plays, the S&P 500 Futures pare early Asian session gain while the US 10-year Treasury yields seesaw near the highest levels since July 2019, around 2.14% by the press time.

Moving on, geopolitical and covid updates may entertain gold traders with immediate attention on China’s Retail Sales and Industrial Production for February, expected 3.0% and 3.9% YoY versus 1.7% and 4.3% respectively. Following that, US PPI and ECB President Lagarde’s speech will be important to watch for fresh intraday clues.

Technical analysis

Gold extends the previous day’s downside break of an ascending support line from early February towards a convergence of the 21-DMA and 38.2% Fibonacci retracement of September 2021 to March 2022 upside, around $1,935.

The bearish bias also gains support from the most downbeat MACD signals since the initial days of the last month, as well as the downward-sloping RSI line.

It’s worth noting, however, that a clear downside break of $1,935 will quickly direct XAU/USD bears towards the $1,900 threshold. Though, tops marked during November 2021, around $1,877, could challenge the metal sellers afterward.

On the contrary, recovery moves need to rise beyond the previous support line, around $1,952 by the press time.

Even so, the $2,000 threshold and $2,050 may challenge the gold buyers before directing them to the $2,070-75 area, comprising highs marked during late 2020 and this month.

Gold: Daily chart

Trend: Further weakness expected