Gold Price Forecast: XAU/USD drops to $1,710 as US dollar rises with yields ahead of data

• Gold Price holds lower ground after US dollar recovers ground after Tuesday’s steep sell-off.
• Risk tone remains tepid amid geopolitical issues while Treasury yields recover.
• XAU/USD corrects from three-week highs after rejection at the 50 DMA barrier.

Gold Price is in the red for the first time so far this week, as the US dollar is seeing a sweeping demand amid a risk-off market profile. The greenback is unwinding the 1.3% overnight sell-off, which marked its biggest drop since March 2020 ahead of the critical US ADP employment report and ISM Services PMI.

Hopes for aggressive Fed rate hikes are back on the table after the hawkish RBNZ 50 bps rate increase, fuelling a fresh upswing in the US Treasury yields across the curve. The non-yielding gold feels the heat from the upsurge in the dollar alongside the yields.

Escalating geopolitical tensions between Russia and the West are doing little to offer any respite to XAU bulls, as risk-off flows and the dollar demand dominate across the financial market. Investors await the top-tier US economic releases and Fedspeak for fresh hints on the size of the next Fed rate hike.

Also read: Gold Price Forecast: 50 DMA appears a tough nut to crack for XAU/USD bulls ahead of US data

Technically, the bearish 50-Daily Moving Average (DMA) at $1,724 has tempered the gold price rally. A sustained break above the 50 DMA is needed to challenge the September highs at $1,735, above which the $1,750 psychological level will come into play.

On the downside, the previous critical resistance now support at $1,700 could offer temporary reprieve to buyers, below which the previous day’s low of $1,695 could be revisited.

Gold Price: Daily chart

Gold Price: Additional levels to consider