Gold Price Forecast: XAU/USD retreats to $1,922 support as Ukraine tries to renew peace talks, yields ease

• Gold prices struggle for clear directions as Ukraine-Russia headlines battle firmer yields.
• Ukraine President Zlenskyy reiterated readiness to dump NATO plans, Russia overcomes default fears with second coupon payment.
• US Treasury yields refreshed three-year high before the latest retreat.
• Gold Price Forecast: XAU/USD bulls to face an uphill battle amid hawkish Fed, Ukraine saga

Gold (XAU/USD) reverses early Asian recovery rebound while dropping back to $1,932, down 0.15% intraday amid the initial European session on Tuesday.

Even so, the yellow metal prints mild gains on a weekly basis, considering the previous day’s upbeat start, following the biggest week-on-week slump since June 2021.

The metal’s latest weakness could be linked to cautious optimism after Ukraine President Volodymyr Zelenskyy showed readiness to discuss commitment from Ukraine not to seek NATO membership in an attempt to overcome the deadlock in the peace talks. Also favoring the gold sellers could be the headlines from Reuters suggesting Russia’s ability to avoid another default by channeling $65.63 million for coupon payout on 2029 Eurobond to Russia's National Settlement Depository.

Alternatively, a retreat in the US Treasury yields from multi-month high tests the XAU/USD bears. That said, the US 10-year Treasury yields and the 2-year counterpart both rose to a fresh high since May 2019 during the Asian session before recently easing to 2.32% and 2.16%.

Hawkish comments from the Fed policymakers, including Chairman Jerome Powell, underpinned the bond rout the previous day. On the same line were upbeat fears of inflation due to the escalating Ukraine-Russia war.

Looking forward, gold prices will take clues from the Fedspeak, as well as headlines from Kyiv and Moscow, before the economic calendar gets populated on Thursday.

Technical analysis

Gold prices fade bounce off weekly support line amid steady RSI and bullish MACD signals, suggesting further declines towards the support retest, around $1,922 at the latest.

However, the 200-SMA and late February’s low, respectively around $1,910 and $1,878, will challenge the metal’s weakness past $1,922.

In a case where XAU/USD drops below $1,878, a south-run towards January’s high near $1,853 can’t be ruled out.

Meanwhile, recovery moves will have a tough time crossing the $1,950-55 resistance area comprising 100-SMA and 61.8% Fibonacci retracement (Fibo.) level of February 24 to March 08 upside.

It’s worth noting, though, that gold’s successful run-up beyond $1,955 enables the buyers to aim for the $2,000 psychological magnet with the 50% Fibo. surrounding $1,975 likely to act as an intermediate halt.

Gold: Four-hour chart

Trend: Sideways