Gold Price Forecast: XAU/USD corrects from multi-month high, downside seems limited By HareshMenghani Gold Commodities RiskAppetite XAUUSD
he US Secretary of State Antony Blinken accepted an invitation to meet Russian Foreign Minister Sergei Lavrov late next week and raised hopes for a diplomatic solution to the East-West standoff over Ukraine. This helped the global risk sentiment to stabilize a bit, which, in turn, was seen as a key factor that undermined the safe-haven XAU/USD. The downside, however, remains cushioned amid fears of an imminent Russian invasion of Ukraine.
On Thursday, British Foreign Secretary Liz Truss dismissed Russia's claims that it is withdrawing troops and said that the buildup around Ukraine has shown no signs of slowing down. Adding to this, UK Prime Minister Boris Johnson and US President Joe Biden accused Russia of fabricating a pretext to invade Ukraine. It is worth recalling that Russian media reported on Thursday that rebels in eastern Ukraine accused government forces of shelling their territory.
Conversely, the Russian Ministry of Defense said that around 10 military convoys have left Crimea and released a video showing a logistics unit coming back to its base after the completion of drills. Adding to this, the latest update from US satellite image company, Maxar Technologies, showed that Russia has pulled back some equipment from the Ukraine border. The contradicting headlines should keep a lid on any optimistic move in the markets.
Nevertheless, the XAU/USD, for now, seems to have snapped two days of the winning streak, though remains on track to record gains for the third successive week. Market participants now look forward to the release of the US Existing Home Sales data, due later during the early North American session. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to the commodity.
On the flip side, bulls might now wait for sustained strength above the $1.900 mark before positioning for any further gains. The next relevant resistance is pegged near the $1,908-$1,910 region ahead of the 2021 high, around the $1,816 area. Some follow-through buying will reaffirm the constructive
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