Gold Price Forecast: XAU/USD climbs towards $1,840 despite renewed hawkish comments from the Fed

• The price of gold recovers and recovers the area of ​​$1,840 in a northerly direction.
• Last week’s US economic data and hawkish comments continue to dampen market sentiment.
• Gold Price Preview: Will face the 50 DMA as resistance, followed by the 20 DMA; otherwise, it could fall as low as $1,800.

Gold price is advancing after hitting a 6-week low around $1,819 and is heading towards the 50-day EMA, up 0.30% from its opening price. As of this writing, the XAU/USD pair stands at $1,845.82, bolstered by US dollar (USD) weakness, undermined by falling Treasury yields.

Gold rises to the $1,840 mark on a US holiday.

At the start of the North American session, US stock futures are trading in the red, barring the Dow Jones. Monday’s session would be boring due to tight liquidity as the US is still a President’s Day holiday.

Economic data released last week in the US has nervous traders, who had begun to price in a more hawkish Fed. Uncertainty over where the Federal Funds Rate (FFR) will peak triggered the second week in a row that US stocks ended with losses. Furthermore, Fed Governor Bowman and Christopher Waller were the latest policy makers to insist on the need to raise rates for longer as the US central bank struggles to control inflation.

Last Tuesday, the US economic calendar revealed that the Consumer Price Index (CPI) slowed down more than estimated. Two days later, however, prices paid by producers, also known as PPIs, topped estimates and the previous month’s data on a month-on-month basis, reigniting speculation that the Fed would continue to tighten monetary policy as rate cut speculation is beginning to fade.

A reflection of this was the rise in US Treasury bond yields, which closed last week at 3.822%, eight basis points (bp) above the previous week and supported the dollar. The Dollar Index (DXY), an indicator of the value of the dollar against a basket of six currencies, exceeded 104,000 points. However, on the session, the DXY is down 0.03% at 103.849.

What is there to watch out for?

The US economic calendar will include Existing Home Sales for the week, S&P global PMIs in their final readings, the Fed’s preferred indicator for inflation, core PCE and University of California Consumer Sentiment. Michigan (UoM).

Gold Technical Analysis

From a technical point of view, XAU/USD jumped from the 100-day EMA at $1,820 and broke above the $1,840 zone as buyers prepared to storm the 50-day EMA at $1,854.08. To the upside, the first resistance for XAU/USD would be the 50-day EMA, followed by the 20-day EMA at $1,868.83, before the daily high of $1,890.21 on February 9. To the downside, the first support for XAU/USD would be the 100 day EMA, followed by the 200 day EMA at $1,802.46, before $1,800.