Gold Price Forecast: XAU/USD stair-steps higher past $1,950 as US Dollar, yields retreat

• Gold price picks up bids to pare intraday losses as markets brace for top-tier inflation data.
• Mixed concerns over rate hikes, banking weigh on yields even as China tries to lure XAU/USD bulls.
• Central bank speeches, inflation clues will guide the Gold price amid quarter-end positioning.

Gold price (XAU/USD) consolidates intraday loss, the second one in a row around $1,965 as US Dollar, as well as the Treasury bond yields, struggle to defend the previous day’s gains amid mixed sentiment during Thursday’s European session. With this, the bright metal pares the second weekly loss amid a cautious mood ahead of the top-tier inflation data from Europe and the US.

While portraying the sentiment, the US Dollar Index (DXY) retreats from its intraday high to print mild losses near 102.60 while S&P 500 Futures struggle around a one-week high marked the previous day. Further, the US 10-year and two-year Treasury bond yields fade upside momentum around 3.57% and 4.09% respectively.

China Premier Li Qiang’s hopes that the economic situation in March is even better than in January and February joins Fed Chair Jerome Powell’s signals of policy pivot after one more rate hike seems to have underpinned the latest run-up of the Gold price.

It should be noted, however, that the majority of the central bankers defend their previous bias about inflation and hence challenge the Gold buyers. Additionally, International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva said on Thursday, “Urgently need faster, more efficient mechanisms for providing debt support to vulnerable countries.” Her comments renew banking fears which eased previously.

Above all, the market’s preparations for top-tier inflation numbers from Europe and the US seem to allow the Gold price to trim weekly losses. That said, the US fourth quarter (Q4) Core Personal Consumption Expenditure (PCE) and final prints of the Q4 Gross Domestic Product (GDP) can entertain intraday traders of the XAU/USD.

Also read: US February PCE Inflation Preview: Bad news for the Dollar, good news for the Fed?

Gold price technical analysis

Gold price bounces off the weekly support line while staying within an eight-day-old symmetrical triangle. In doing so, the XAU/USD pays little heed to the sluggish MACD to pare the second consecutive weekly loss.

That said, the Gold price currently rises towards a convergence of the 100 and 200 Hour Moving Average (HMA), around $1,970, a break of which could propel XAU/USD towards the $1,985 hurdle.

However, the top line of the stated triangle, close to $1,996, quickly followed by the $2,000 psychological magnet, could challenge the Gold buyers afterward.

Meanwhile, the immediate support line precedes the aforementioned triangle’s bottom line to restrict short-term XAU/USD downside near $1,958 and $1,950 in that order.

Following that, a quick drop to the 61.8% Fibonacci retracement level of the metal’s March 15-20 upside, near $1,933, can’t be ruled out.

Overall, Gold price remains sidelined despite the latest recovery.

Gold price: Hourly chart

Trend: Limited recovery expected