Gold Price Forecast: XAU/USD senses responsive buying below $1,900 but still inside the woods

• Gold prices have found significant bids before $1,900 as a value bet.
• Progress in peace talks between Russia and Ukraine has underpinned the risk-on impulse.
• The DXY eyes below 98.00 on an upbeat market mood.

Gold (XAU/USD) has been hammered by the market participants as safe-haven assets lose appeal on progress in peace talks between Russia and Ukraine. The precious metal witnessed a steep fall this week after failing to sustain above the grounds of $1,950.00. Although a responsive buying slightly below $1,900 has pushed the gold prices near $1,920.00.

The Russian administration is withstanding the initial step of ceasefire with Ukraine and has withdrawn its troops in northern Ukraine and Kyiv. While Ukraine has adopted a neutral status and is abstaining from an alliance with the NATO community.

The initial gesture towards the roadmap of truce by Moscow and Kyiv has improved the market sentiment. Risk-sensitive assets are gaining traction amid active risk-on impulse.

Meanwhile, the US dollar index (DXY) has also faced the heat of sheer selling in the safe-haven assets. The DXY is reversing to Tuesday’s low around 98.00 and is likely to extend its losses amid the violation of the latter. The higher odds of 50 basis points (bps) interest rate hike by the Federal Reserve (Fed) are intact amid modest US JOLTS Job Openings data. The JOLTS Job Opening was recorded at 11.266M, a tad higher than the previous figure of 11.263M and the estimate of 11M.

For further direction, investors will focus on the quarterly US Gross Domestic Product annualized (Q4), which is due on Wednesday. A preliminary estimate for quarterly US GDP is 7%, synonymous with the previous figure.

Gold Technical Analysis

On the hourly scale, XAU/USD has sensed responsive buying after the re-test near March 16 low at $1,895.15. The precious metal has overstepped the 20-period Exponential Moving Average (EMA). The Relative Strength Index (RSI) (14) has shifted into a 40.00-60.00 range, which signals a consolidation ahead.

Gold hourly chart