Gold Price Forecast: XAU/USD Retreats from $1950 due to US Dollar Strength, High US Yields

Gold falls for the third consecutive day despite a positive market mood and rising US yields.

Gold Price Forecast: XAU/USD Retreats from $1950 due to US Dollar Strength, High US Yields

Investors expect that the US economy will slowdown and the 2s-10s yield curve has been inverted for the second week.

US economic data mixed was largely ignored by XAU/USD trader.

XAU/USD Price Outlook: In consolidation within $1900-50 range.

As the second quarter starts, gold (XAU/USD), slides down about 0.64% in North American sessions. Russia-Ukraine disputes, higher global inflation and rising US Treasury yields keep the non-yielding metal under pressure. Investors should be aware of the inversion in 2s-10s yield curve as they evaluate the future prospects for yellow metal. As of press time, XAU/USD was trading at $1924.46 per troy ounce.

Positive US economic data and a positive market sentiment weighed heavily on gold

Wall Street closes, and US equity markets are expected to fluctuate. Meanwhile, European bourses closed positive. As peace talks have failed to reach an agreement on a diplomatic end to the conflict between Russia and Ukraine, the Russia-Ukraine War continues. Russia's President Vladimir Putin has put pressure on Europe by signing a decree requiring non-friendly countries to pay in rubles for natural gas.

This triggered a series of negative market moods that led to gold reaching $1950 on Thursday. However, gold prices were affected by positive US economic data.

The March Nonfarm payrolls report was featured in the US economic docket. It showed that 431K jobs were created. This is lower than the 490K predicted by analysts. Although it was slightly less than expected, the market viewed it as a strong report. Forecasts ranged between 0 and 700K so it was not surprising that it was unexpectedly soft. The March Unemployment rate dropped to 3.6% YoY from 3.8% in January and beat the 3.7% estimates.

The US ISM Manufacturing , an indicator of the industry's strength, dropped to 57.1 in March, from 58.6 February. This is well below the 59 estimates by analysts.

The US Dollar Index which measures the greenback's price against a basket of rivals, rose 0.2% to 98.566. This was fueled by US Treasury yields. At 2.371%, the US benchmark 10-year note rises by four basis points.

XAU/USD Price Forecast: Technica outlook

XAU/USD has been trading in the $1910-50 area for thirteen consecutive days. It is consolidated and without direction. Relative Strength Index, a momentum indicator that has been oscillating around the 50-midline, turned bearish on Friday at 48.71. The daily moving averages below the spot price indicate an upward bias. However, contradictory signals suggest that we should wait for a new catalyst.

XAU/USD would move higher if it reached $1950.30 on March 1. Brute of this would result in a March 24th daily high at $1966.20. Followed by $2000.

The XAU/USD support at $1910 would be on the other side. A clear break would expose $1910 as the XAU/USD first support. The 50-day moving average (DMA), at $1898.11, would be followed by $1877.14 on November 16, 2021. This will be followed by $1877.14 daily high, and then the 200-DMA at $1820.63.