Gold remains pressured near intraday low but pauses further declines amid markets indecision.
Russia, Ukraine‘s high demands for peace weigh on negotiation’s ‘brighter’ progress.
China‘s covid risk, pre-Fed woes also challenges risk-on mood, underpinning gold’s safe-haven demand.
Gold Weekly Forecast: Gold to extend downward correction on hawkish Fed
Gold (XAU/USD) pauses the early Asian selling around $1,975 ahead of Mondays European trading session.
It‘s worth noting that China is one of the world’s largest gold consumers and the fresh fears of covid, due to the highest daily infections in two years, negatively affects the gold prices. Though, chatters surrounding a halt in the gold production and India‘s ramping gold demand, as well as inflation fears, keep the yellow metal on the bull’s radar.
That said, the record-high US inflation expectations, per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, adds strength to the US Treasury yields as market players await this weeks key Fed minutes, which in turn weigh on the gold prices.
Amid these plays, S&P 500 Futures pare early Asian session gains while the US 10-year Treasury yields stay firmer around 2.04%. Further, the US 5-year T-bond yields refresh record top above 2.0%, marking high hopes of the Feds 0.50% rate-hike this week.
In addition to the Fed, Ukraine updates and headlines from China will also be important to watch for a clearer XAU/USD prediction.
Technical analysis
A clear downside break of the two-week-old ascending trend line joins bearish MACD signals and descending RSI line to keep gold sellers hopeful.
However, a convergence of the 100-SMA and an upward sloping trend line from February 03, around $1,945 by the press time, appears a tough nut to crack for the XAU/USD bears.
If at all gold sellers conquer $1,945 support, the 200-SMA level of $1844 will act as a last defense of the buyers.
Meanwhile, the support-turned-resistance line near $1,992 precedes the $2,000 psychological magnet to challenge the short-term recovery of XAU/USD prices.
Following that, multiple hurdles around $2,035 and $2,060 may test the bold bulls ahead of directing them to the $2,070-75 area comprising the latest high and the year 2020 top.
Overall, gold is likely to witness a pullback towards short-term support convergence but the XAU/USD bulls arent yet out of the woods.
Gold: Four-hour chart
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