Gold Price Forecast: Can XAUUSD resume its advance?

• Mounting concerns related to the Russian invasion of Ukraine keep investors in cautious mode.
• Global stocks trade mixed, but government bond yields are on the rise.
• Gold Price is neutral, but technical signs hint at another leg lower.  

XAUUSD retains modest intraday gains in a soft start to the week. The old news are no news for Gold Price, and financial markets are mixed amid the absence of a fresh catalyst. The US Dollar trades with a soft tone across the FX board, helping the bright metal to remain afloat, as US indexes managed to bounce from their early lows. The S&P 500 and the Nasdaq Composite are pretty much unchanged from their Friday’s closing levels, while the DJIA is the worst performer, down 153 points or 0.44%.

The poor performance of equities is directly linked to the ongoing situation in Eastern Europe. Russia keeps shelling Ukraine and is closing up to Kyiv. Hopes for a diplomatic solution cooled down after the Kremlin said that they are waiting for far more progress in talks before the presidents of the two nations can meet face to face. Meanwhile, the European dependence on Russian oil and gas has become a major headache for the Union’s leaders as global sanctions escalate. Still, sentiment-related trading seems to be temporarily on pause ahead of additional developments, to the detriment of Gold Price. 

Across the pond, Asian and European indexes trade mixed, but government bond yields are up, with the yield on the US 10-year Treasury note up to 2.24% amid concerns inflation will keep on rising, regardless of central banks’ measures. Oil prices resumed their advances after Russia’s Deputy PM Novak said crude price may rise to $300 a barrel if Russian oil is shunned, but that's unlikely. The barrel of West Texas Intermediate is now above $107.00 a barrel after bottoming at around $93.50 last week. 

Also read: Commodity traders eye big gains as Fed risks another recession – What’s next? [Video]

Gold Price technical outlook

XAUUSD is accelerating north above a critical Fibonacci level at around $1,925.00, the 50% retracement of this year’s rally, shrugging off the near-term negative tone. Nevertheless, Gold Price continues trading below a flat 20 DMA, while the daily Momentum maintains its bearish slope within negative levels. The RSI indicator, on the other hand, has turned flat around its midline, indicating decreasing selling interest, but failing to anticipate a more sustainable advance in the near term.

Worth noting that Gold Price bottomed last week at $1,895 a troy ounce, just ahead of the 61.8% retracement of the mentioned rally at $1,890.60, a critical support level. On the other hand, the 38.2% retracement comes at around $1,960, where selling interest has proved strong. The bright metal would need to clear the latter to actually turn bullish.  

Technicals hint at a decline, while fundamentals hint at an advance. The aforementioned Fibonacci levels are critical as XAUUSD could find its way on a clear break of any of those.