Gold Price Forecast: XAU/USD climbs back above $1,830 level amid retreating bond yields By HareshMenghani Gold Commodities Inflation Fed XAUUSD
o-week high. Against the backdrop of geopolitical risks, a generally weaker tone around the equity markets acted as a tailwind for the safe-haven XAU/USD. Apart from this, concerns about the continuous rise in the US consumer prices further benefitted the precious metal's status as a hedge against inflation. In fact, data released on Thursday showed that the headline US CPI accelerated to a 40-year high in January.
The US bond yields, however, retreated a bit from the aforementioned highs, which prompted some intraday US dollar selling. This, in turn, was seen as a key factor that extended some support to the dollar-denominated commodity, though the uptick lacked bullish conviction. The prospects for a faster policy tightening continued acting as a headwind for the non-yielding gold and warrants some caution for aggressive bullish traders.
Nevertheless, the metal has now moved into the positive territory and was last seen hovering near the daily high, just above the $1,830 level. Market participants now look forward to the, featuring the release of the Prelim University of Michigan US Consumer Sentiment Index. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to gold prices.
On the flip side, weakness back below the $1,825 level might continue to attract some buying and remain limited near the $1,818 horizontal support. This is followed by the very important 200-day SMA, currently around the $1,807 region, which if broken decisively will negate any positive bias and shift the bias in favour of bearish trades.
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