- Gold fell for the first time in the week, down 0.70% amid a better market mood, in the second round of talks between Russia and Ukraine.
- US Treasury yields rise, and the US dollar follows.
- XAU/USD Technical Outlook: Bullish bias, although it could extend its downside move before resuming the uptrend.
The price of gold (XAU/USD) recedes from the daily high of $1,948 to current levels as Ukraine-Russia is reported to hold a second round of talks later today, Tass reported citing an official from Ukraine’s presidential office. The headline shifted the market mood towards risk appetite, to the detriment of safe-haven assets like gold, while European and US indices post gains. At time of writing, XAU/USD is trading at $1,931.
Meanwhile, US Treasury yields are making up some ground, led by 10-year Treasury yields, rising eight basis points to 1,792%, weighing on the non-yielding metal. Furthermore, the dollar continues its advance, making gains for the third consecutive session, rising 0.20% to settle at 97.588.
Russia-Ukraine War Update
Ukraine and Russia will meet for a second round of peace talks. The Kremlin reported that the Russian delegation is ready to continue the negotiations, although it is not clear whether Ukrainian officials will attend. On the contrary, the Ukrainian Foreign Minister said that Russia’s demands have not changed from what Russian President Putin said at the beginning of the war. Therefore, the chances of a ceasefire are slim.
US President Biden announced that the US would join allies and ban Russian flights from using US airspace. Meanwhile, the US Department of Justice is gathering a task force to prosecute the crimes of Russian oligarchs and join EU allies in seizing assets.
Comments from Federal Reserve Chairman Jerome Powell
Meanwhile, Federal Reserve Chairman Jerome Powell said, “We hope it will be appropriate to raise the target range for the fed funds rate at our meeting later this month,” adding that the US central bank had said it would be appropriate to raise the target range for the federal funds rate. The US would follow with cuts to its rate on $8.5 trillion of assets.
The US economic docket featured the ADP employment change for February, which rose 475,000 more than the 388,000 estimate and could likely be a prelude to Friday’s Non-Farm Payrolls report.
XAU/USD Price Forecast: Technical Outlook
XAU/USD’s steepest uptrend appears to be tapering off. Over the last four days, volatility levels have been “extreme”, pushing the non-yielding metal to an 18-month high at $1,974.48, followed by a pullback to $1,883. Wednesday’s price action retraced from a daily high of $1,948, with a June 1, 2021 high of $1,916.03, but gave way to gold bulls, which pushed prices to a 12 Oct 2021 high. 2020 at $1933.29.
That said, XAU/USD’s bullish bias still. However, before resuming the uptrend, a downside could not be ruled out. If that scenario plays out, the first support for XAU/USD would be the June 1, 2021 high of $1,916.03. A break down would expose the $1,900 psychological level, followed by the upper trend line of the Pitchfork channel around $1,885.
In the event of a breakout to the upside, the first resistance would be on October 12, 2020, with a high of $1,933.29, followed by the March 1 high of $1,950.30 and the yearly high of $1,974.48.
Additional technical levels
Source: Fx Street
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