Gold Price Forecast: XAU/USD clings to gains near YTD peak, just below $2,030 level

• Gold price scales higher for the third successive day and moves back closer to the YTD peak.
• Expectations for an imminent Fed rate hike pause weigh on the US Dollar and lend support.
• Looming recession risks provide an additional boost to the safe-haven metal and favour bulls.

Gold price gains positive traction for the third successive day on Thursday and extends its steady intraday ascent through the first half of the European session. The XAU/USD currently trades around the $2,030 region, just below the YTD peak touched last week and seems poised to build on its recent strong gains recorded over the past month or so.

Bets for rate-hike pause by Federal Reserve benefit Gold price

The latest consumer inflation figures from the United States (USD) released on Wednesday reaffirmed market expectations that the Federal Reserve (Fed) may soon be finished raising interest rates. Adding to this, the March Federal Open Market Committee (FOMC) showed that several policymakers considered pausing interest rate increases after the failure of two regional banks. This leads to a further decline in the US Treasury bond yields and is seen as a key factor benefitting the non-yielding Gold price.

Weaker US Dollar further underpins Gold price

Meanwhile, growing acceptance that the Fed will pause its monetary tightening after hiking one last time next month and possibly start cutting rates during the second half of the year continues to weigh on the US Dollar (USD). In fact, the USD Index, which tracks the Greenback against a basket of currencies, drops to its lowest level since early February. This, along with worries about a deeper global economic downturn, contributes to the bid tone surrounding the US Dollar-denominated Gold price.

Looming recession risk contributes to the positive move

It is worth recalling that the International Monetary Fund (IMF) trimmed its 2023 global growth outlook on Tuesday, citing the impact of higher interest rates. Furthermore, the mixed Chinese trade data released earlier this Thursday raises concerns that the post-COVID recovery in the world's second-largest economy is losing steam. This is seen as another factor driving flows towards the safe-haven Gold price and supports prospects for an extension of the recent well-established short-term bullish trajectory.

Traders now look to macroeconomic data from United States

The aforementioned fundamental backdrop suggests that the path of least resistance for the XAU/USD is to the upside and any meaningful dip could be seen as a buying opportunity. Market participants now look forward to the US economic docket, featuring the release of the Producer Price Index (PPI) and the usual Weekly Initial Jobless Claims. The data might influence the USD price dynamics and provide some impetus to Gold price later during the early North American session.

Gold price technical outlook

From a technical perspective, some follow-through buying beyond the $2,032 area, or the YTD peak, will be seen as a fresh trigger for bullish traders. The gold price might then accelerate the momentum towards the $2,048-$2,050 intermediate resistance en route to the all-time high, around the $2,070-$2,075 region.

On the flip side, the daily swing low, around the $2,014-$2,013 zone, could act as a support and protect the immediate downside. Any subsequent fall is likely to attract fresh buyers near the $2,000 psychological mark. This should help limit losses for Gold price near the $1,990-$1,980 horizontal support.

Key levels to watch