Gold Price Forecast: XAU/USD continues to struggle above $1,840 as yields soar ahead of Fed minutes

• Gold price is struggling to sustain above $1,840.00 as yields escalate ahead of Fed minutes.
• A fresh rebound in the US economic indicators that provide guidance on inflation has cleared that inflation is stubborn in nature.
• Gold price is doing efforts in shifting its auction above the 20-period EMA.

Gold price (XAU/USD) is displaying a lackluster performance above $1,840.00 in the Tokyo session. The precious metal is gauging a direction, however, the volatility contraction will continue to stay ahead of the release of the Federal Open Market Committee (FOMC) minutes.

Investors’ risk appetite has trimmed as uncertainty has escalated ahead of the opening of markets in the United States after an extended weekend. This has led to a further decline in risk-sensitive assets like S&P500 futures. The US Dollar Index (DXY) has shown a rebound to near 103.70 but is still inside the woods ahead of the FOMC minutes. Meanwhile, the alpha generated on 10-year US Treasury bonds has climbed above 3.86%.

A fresh rebound in the US economic indicators that provide guidance on inflation has cleared that the Consumer Price Index (CPI) is stubborn in nature and will force Federal Reserve (Fed) chair Jerome Powell to raise rates further to tame price pressures. For more guidance, the FOMC minutes will be keenly watched.

But before that, the release of the preliminary S&P Global PMI (Feb) figures will be keenly watched. As per the consensus, the preliminary Manufacturing PMI (Feb) will land lower at 46.8 vs. the prior release of 46.9. And, the Services PMI will release at 46.6 against the former release of 46.8.

Gold technical analysis

Gold price has shown a responsive buying action after a downside trend to near the 38.2% Fibonacci retracement (plotted from November 03 low at $1,616.69 to February 2 high at $1,959.71) at $1,828.95. The dotted downward-sloping trendline from February 9 high at $1,890.27 will act as a major barricade for the Gold bulls.

The precious metal is aiming to shift its auction above the 20-period Exponential Moving Average (EMA) at $1,841.00, which will activate the short-term bullish trend.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the 40.00-60.00 range from the bearish range of 20.00-40.00, which indicates that the asset is no more bearish for now.

Gold four-hour chart