Gold Price Forecast: XAU/USD pierces $1,800 as US T-bond yields rise

• Gold aims higher, as nervousness grows on investors, of what the Federal Reserve might do next.
• The ECB adds to the growing list of central banks, saying that inflation might not be as “transitory” as expected, but expects it to fade in 2022.
• XAU/USD: The yellow-metal gained traction, as the US dollar index plunged 0.71%, well below 93.40.

Gold (XAU/USD) climbs during the Asian session, is up 0.09%, trading at $1,800.00 a troy ounce at the time of writing. The non-yielding metal recovered some of its brightness as it seesawed on Thursday.

Risk-on market sentiment kept investors in and out of gold, thus spurring violent swings in the yellow metal. Further, slower than expected US economic growth and central bank tightening dents the prospects on the greenback, ultimately favoring gold.

In the meantime, the US T-bond yields rose in the session, with the 10-year note improving to 1.578%, up to four basis points. Meanwhile, the US Dollar Index fell 0.71%, sitting at 93.35.

On Thursday, the European Central Bank (ECB) President Christine Lagarde said that higher inflation might be around for longer than expected. However, the bank estimates prices will start moderating in 2022.

That said, expectations around gold lie heavily on the Federal Reserve November meeting. A $15 Billion bond taper is priced in. However, If the Federal Reserve aims for a quicker than expected bond-tapering, that might send gold tumbling below the $1,720 threshold and potentially towards a renewed test of 2021 lows.

XAU/USD Price Forecast: Technical outlook

Daily chart

Gold (XAU/USD) spot price is above the confluence of the 100 and 200-day moving average (DMA) and on Tuesday broke a downward slope trendline previously resistance-turned-support, which could be viewed as a bullish signal. The Relative Strength Index (RSI) is at 58, aims slightly low, but as it remains above the 50-midline, it is bullish for the yellow metal.

To resume the upward trend, gold buyers will need a daily close above $1,800. In that outcome, the September 3 high at $1,834 would be the first resistance level. A clear break above the latter would expose the June 4 low at $1,855, followed by the $1,900 threshold.