Gold Price Forecast: XAU/USD treads water ahead of United States Purchasing Managers Index

• Gold price remains sidelined between 100- and 50-day Exponential Moving Averages (EMAs).
• Sluggish markets, mixed sentiment keep traders waiting for fresh clues even as United States data favored XAU/USD bears previously.
• Federal Reserve concerns, geopolitical headlines will be eyed together with the US PMIs for February.

Gold price (XAU/USD) struggles for clear directions around $1,840, following a mildly negative start to the week’s trading, as traders await the preliminary readings of the United States Purchasing Managers Index (PMI) for February. Adding strength to the XAU/USD inaction could be the lack of directives from markets amid Monday’s holiday in the US, as well as a light calendar before Tuesday’s PMIs.

Gold bears remain hopeful but bulls resist stepping back

The fresh hawkish concerns from the United States data surrounding inflation and output have renewed hopes that the Federal Reserve (Fed) will keep the interest rates higher for longer. The same underpins the US Dollar’s rebound and exerts downside pressure on the Gold price.

However, the last round of the Fed policymakers appeared mixed and hence seems to raise doubts on the policy pivot, as well as the future rate lifts from the US central bank, which in turn puts a floor under the XAU/USD price.

Alternatively, hopes of more stimulus from China, as perceived from the People’s Bank of China’s (PBOC) inaction and the government’s measures to defend the struggling housing sector, seem to favor the Gold buyers. Furthermore, the nearness to the Fed’s peak rate will likely help the XAU/USD bears from rejecting the defeat.

Geopolitical fears, Purchasing Managers Index eyed ahead of Fed Minutes

While the aforementioned catalysts highlight this week’s Fed Minutes for clear directions, fears from China, Russia and North Korea seem to gain significant attention. They should be eyed for clear directions of the Gold price. Also important will be the first readings of the global PMIs for February.

Should the scheduled US PMIs appear firmer than in January and manage to cross the 50.0 mark, despite unimpressive expectations, the odds of witnessing further US Dollar strength and the XAU/USD weakness can’t be ruled out.

On the contrary, the fears surrounding the US and China will likely keep exerting downside pressure on the Gold price as neither the US nor China appears interested in solving the political differences. Recently, both nations alleged to each other over the balloon shooting, whereas the US diplomatic ties with Taiwan may tease Beijing. On the same line, the United Nations (UN) Security Council is alarmed by Japan for North Korea’s missile testing, and the same can weigh on the sentiment, as well as the XAU/USD price.

S&P 500 Futures print mild losses near 4,075 amid sluggish US 10-year Treasury bond yields. Even so, the benchmark US bond coupons are near the highest levels marked since early November 2022, keeping the US Dollar buyers hopeful and weighing on the Gold price.

Gold price technical analysis

Gold price seesaws between the 100-day and 50-day Exponential Moving Averages (EMAs), respectively, near $1,820 and $1,854 by the press time.

The pair’s latest inaction should have taken clues from the sluggish Relative Strength Index (RSI) line, placed at 14.

However, the bearish signals from the Moving Average Convergence and Divergence (MACD) indicator join the XAU/USD’s sustained break of the previous support line from late November 2022, close to $1,912 at the latest, keeping the Gold bears hopeful.

The two-week-old descending trend line strengthens the $1,820 support comprising the 50-day EMA.

Hence, the Gold price may keep grinding higher unless declining back below $1,820. However, the upside appears limited unless the XAU/USD stays below $1,912.

Gold price: Daily chart

Trend: Further upside expected