Gold Price Forecast: XAU/USD declines as US yields recover, as markets await new catalysts

• XAU/USD is trading near the $1,970 level, registering a loss of 0.40%.
• US yields have recovered and traders are looking for possible new catalysts to shape their expectations for the Fed’s next moves in a quiet week.
• It Highlight of the week is Wednesday’s FOMC minutes.

In the Monday session, the XAU/USD pair registers losses of 0.40% and is mainly trading around $1,970. The key factors driving these changes include a slight recovery in US yields and an uptick in caution in the markets, as traders await the revelation of new catalysts to continue betting on the Federal Reserve (Fed). In addition, markets continue to evaluate last week’s US inflation data and look for any clues in the Federal Open Market Committee (FOMC) minutes from the last November meeting, which will be published on Wednesday.

In the last week, the yellow metal’s price gained momentum due to increasing downward pressure on yields in the US and the US Dollar due to soft US Consumer Price Index (CPI) numbers. October USA. On Friday, the 10-year yield fell to 4.38% from its late October high of 5.02% to the lowest level since late September. Similarly, the 2-year and 5-year yields fell to their lowest since September, towards 4.80% and 4.35%, respectively.

On Monday, those yields rebounded to 4.90%, 4.47%, and 4.46%, which seems to me to be putting pressure on the non-yielding metal. The question now is whether one month of positive inflation figures will be enough to end the Fed’s tightening cycle. Any new signs of a pick-up in inflation or an overheating of the economy could fuel the Fed’s hawkish bets. Fed, which could affect the price.

XAU/USD levels to watch

Technical indicators on the daily chart reflect uncertainty in near-term momentum. Despite this, the Relative Strength Index (RSI) is enjoying a pleasant stay in positive territory, indicating intact buying momentum. The Moving Average Convergence Divergence (MACD) exhibits flat green bars, which signifies a possible slowdown in the bullish charm, but does not necessarily hint at a complete trend reversal.

Furthermore, the price is trading just below its 20-day SMA, but above the 100-day and 200-day SMA, suggesting a broader bullish bias. This appears to contrast with the short-term bearish sentiment emerging from the recent stagnation in bullish action. However, this outlook may also mean that the bulls are taking a pause after a week of 2.2% gains before continuing their bullish march.

Support levels: $1,940 (200-day SMA), $1,930 (100-day SMA), $1,900.
Resistance levels: $1,970 (20-day SMA), $2,000, $2,020.

XAU/USD daily chart