Gold Price Forecast: Poised to challenge a critical support at $1,890.64
- Russian invasion of Ukraine overshadows coronavirus-related jitters, which return to the table.
- US government bond yields on the rise fuel demand for the American currency.
- XAUUSD is technically poised to extend its decline in the upcoming sessions.
Gold Price has extended its slide to an almost two-week low of $1,920.51 a troy ounce, as hopes for an end to the Russia-Ukraine crisis weighed on commodity prices. At the same time, the American dollar is finding demand on the back of soaring government bond yields ahead of the US Federal Reserve monetary policy decision on Wednesday. In turn, soaring yields undermine demand for high-yielding stocks.
Ukrainian President Volodymyr Zelenskyy’s adviser said that they are expecting to reach a peace agreement with Russia in the next couple of weeks, in May at the latest.
The sour tone of equities could also be explained by the latest coronavirus outbreak in China, which led to a massive lockdown in the country. Speculative interest is now expecting slower economic progress and a decreased demand for commodities coming from the government. It is worth noting that some European countries are also experiencing a covid-19 outbreak, overshadowed in the headlines by Moscow’s attack on Kyiv.
Also read: Gold is trending lower – A break below 1910 is a sell signal [Video]
XAUUSD Technical Outlook
XAUUSD is currently trading at around the 50% retracement of the January/March rally at $1,2925.20. Gold Price is down for a third consecutive day and biased lower according to technical readings in the daily chart, which shows that technical indicators are heading south almost vertically.
The 61.8% retracement of the mentioned advance comes at $1,890.64, providing static support. A break below the latter should send the bright metal into a selling spiral that could extend toward the 1,800 figure in the upcoming days.
There are no technical signs of bearish exhaustion, which suggests that intraday recoveries should continue to attract sellers. A near-term resistance level is located at $1,935.50, while a more relevant one is the $1,960 price zone, where the metal has the 38.2% retracement of the aforementioned rally.
