Gold Price Forecast: XAUUSD edges high but off daily highs of $1970s after hot US CPI

• Gold prices rose in the North American session by close to 1%.
• Geopolitics, mixed US inflation data, and China’s Covid-19 lockdowns affect oil prices, which lifted XAUUSD.
• Gold Price Forecast (XAUUSD): Remains upward, and a daily close above $1966, might exacerbate a move towards $2000.

Gold (XAUUSD) surges above March 24 high at $1966, and It aims to get back to the $2000 mark after US consumer inflation rose to levels last seen in 1981, amidst a mixed sentiment, courtesy of high global inflation, the Ukraine-Russia conflict, and China’s Covid-19 lockdowns. At the time of writing, XAUUSD is trading at $1967.93 a troy ounce.

Reflection of the market’s sentiment is European and US equities, fluctuating between gainers and losers. The US Department of Labor reported that the Consumer Price Index (CPI) for March rose by 8.5%, higher than 8.4%, while the so-called core CPI, which excludes volatile items like food and energy, expanded by 6.5%, lower than the 6.7%.

The greenback reacted negatively to the news, dropping below the 100.000 mark, while XAUUSD broke above the $1966 threshold as US bond yields fell.

Of late, the US Dollar Index, a measurement of the buck vs. six currencies, reclaimed the 100.00 mark, edges up 0.26%, while the US 10-year Treasury yield is twelve basis points down from the 2.836% highs, towards 2.710%, a tailwind for the non-yielding metal prices, as high inflationary scenarios boosts appetite for the yellow metal.

Aside from this, the Ukraine-Russia conflict extends for the seventh straight week. Ukraine’s President Volodymyr Zelenskyy reported that Russia could make use of chemical weapons, as social media reports emerged that Russia made use of them in Mariupol. However, journalists have not confirmed it, and the US Pentagon Press Secretary Kirby said that the US is aware and will monitor the situation.

Regarding peace talks, Russian President Vladimir Putin said that talks with Ukraine are at a dead end, and there is no doubt that the military operation in Ukraine will achieve its objective.

Gold Price Forecast (XAUUSD): Technical outlook

XAUUSD’s bias is upwards, but since March 16, is trapped in the $1900-66 range. On Tuesday, mixed Us inflation data boosted Gold prospects, as XAUUSD reacted upwards and broke above the top of the range, reaching a daily high at $1978.53, though of late, it is testing the $1966 level as support.

Upwards, XAUUSD’s first resistance would be $1978.53. A breach of the latter would expose the R2 daily pivot at $1984 and then the R3 pivot point at $1998, short of the $2000 mark.