Gold Price Forecast: XAU/USD pares daily loss above 200-HMA as risk-aversion ebbs

• Gold price picks up bids to pare the first daily loss in three.
• Risk-positive headlines from China, Hong Kong appear to favor the latest XAU/USD rebound.
• Gold bears remain hopeful as firmer US Dollar, Treasury bond yields keep recession fears on the table.
• Headlines surrounding Russia also probe bullion buyers ahead of next week’s key Fed meeting.

Gold price (XAU/USD) bounces off intraday low to $1,785 during the initial hour of Thursday’s Asian session as the market players lick their wounds after a negative start.

The latest easing in the risk-off mood, which initially helped the US Dollar to brace for weekly gains, could be linked to the headlines from China. Recently, Shanghai City Authorities mentioned that they will stop requiring Covid test checks for restaurants or entertainment venues from this Friday. On the same line, the South China Morning Post (SCMP) states that Hong Kong is ‘to ease isolation rules’ for infected travelers, with a release on the fifth day.

Even so, the looming fears of economic slowdown, as well as Russia’s usage of nuclear weapons in its war with Ukraine, seemed to weigh on the XAU/USD price. Furthermore, Bloomberg came out with the news suggesting more tension between the US and China due to the latest bills the US Congress is up for passing, which in turn challenges the Gold buyers. “The US is set to pass legislation revamping US policy toward Taiwan and restricting government use of Chinese semiconductors, moves that appear certain to antagonize Beijing even as President Joe Biden seeks to ease tensions,” said Bloomberg.

Amid these plays, the S&P 500 Futures reverse the initial losses while recovering from the three-week low to around 3,935 by the press time. Further, the US 10-year Treasury yields stay inactive near 3.45% while paring the previous day’s losses near the lowest levels since early September.

Looking forward, the Gold price may witness lackluster days ahead of the next week’s Federal Open Market Committee (FOMC) meeting. However, today’s weekly US Initial Jobless Claims, as well as Friday’s preliminary prints of the Michigan Consumer Sentiment Index and 5-year Consumer Inflation Expectations may entertain traders.

Gold price technical analysis

Gold price stays defensive above the 200-Hour Moving Average (HMA) level surrounding $1,773.  In doing so, the yellow metal remains inside an immediate rising wedge bearish chart pattern, currently between $1,782 and $1,795.

It’s worth noting that a two-week-old ascending trend line holds the key to XAU/USD bear’s entry, around $1,771 at the latest.

That said, bearish MACD signals and recently firmer RSI keeps sellers hopeful as the metal portrays the rising wedge chart pattern on the hourly play. However, a clear upside break of the $1,782 hurdle won’t hesitate to refresh the monthly peak surrounding $1,810.

Gold price: Hourly chart

Trend: Limited recovery expected