Gold Price Forecast: XAUUSD reclaims $1900 post-US PCE amid US dollar weakness

• The Gold Price prepared to print its first monthly loss since January 2022, down almost 1.50%.
• After European equities closed, the market sentiment shifted negatively, weighed on by US dollar profit-taking.
• Gold Price Forecast (XAUUSD): Solid support around the 100-DMA lifted prices beyond $1890.

The Gold Price grinds higher on April’s last trading session, after bouncing from weekly lows around $1890, amidst a broad US dollar weakness session, as traders book profits before month’s end. At the time of writing, XAUUSD is trading at $1909.78 a troy ounce during the North American session.

Of late, the market sentiment shifted and turned sour as US equities are recording losses. Meanwhile, Asian and European stock indices finished the week on a higher note, underpinned by Wall Street’s mood on Thursday. Meanwhile, the Fed’s favorite gauge of inflation, the Core PCE for March, heightened by 5.2% y/y, lower than the 5.3% expected by analysts, signaling that inflation could be peaking. Nevertheless, inflation is not out of the woods, and the Employment Cost Index in Q1 jumped from 1% to 1.4%, which could make the Federal Reserve’s goal of a 2% inflation target more difficult.

In the meantime, the US Dollar Index failed to get traction, following inflationary readings, sitting comfortably around 103.400, down half of the percentage point, contrarily to US Treasury yields rising. The US 10-year benchmark note aims higher six and a half basis points, up at 2.891%.

Elsewhere, recent China’s Covid-19 outbreak seems to be controlled by the health office, a signal of relief for the markets, as increased lockdowns in Shanghai cloud the global economic scenario. Additionally, the continuation of the Russia-Ukraine conflict weighs on the inflationary outlook due to the energy/oil embargo that Russia began against “unfriendly” countries.

In the week ahead, the Federal Reserve’s May monetary policy meeting looms is the month’s highlight. However, market participants will keep a close eye on PMIs to be released next week, alongside the Nonfarm Payrolls for April.

Gold Price Forecast (XAUUSD): Technical outlook

The XAUUSD daily chart shows that the yellow metal remains upward biased. Thursday’s low at $1872, which pierced the 100-day moving average (DMA) at $1878.82, was a solid support area as Gold bulls entered the market and lifted the price beyond last month’s low at $1890, reclaiming the $1900 mark.

With that said, the XAUUSD’s first resistance would be April’s 25 daily high at 1934.40. Break above would immediately expose the 50-DMA at 1939.73, followed by an upslope trendline around the $1940-50 area, and then March 24 daily high at $1966.

Key Technical Levels