Gold Price Forecast: XAUUSD stabilizes just ahead of $2,000.00

• Easing Ukraine-Russia tensions weighed on the XAUUSD demand.
• Gold Price corrected extreme overbought conditions, but bulls defend the downside.
• European indexes trade in the green, supporting Wall Street's futures.

Gold Price trades stable just below the $2,000 mark, having found a new temporal balance just ahead of the critical level. Risk appetite returned to trading boards amid hopes the Ukraine-Russia crisis could recede after two weeks. Earlier today, Ukrainian President Zelenskyy's aide said that the country is ready for a diplomatic solution, which further fueled investors' optimism.

Wall Street is sharply up, with the Dow Jones Industrial Average up roughly 600 points and the Nasdaq Composite up 2.84%, quite a nice comeback after Monday's collapse. Meanwhile, speculative interest hit the breaks ahead of Thursday's first-tier events. The European Central Bank will announce its decision on Monetary Policy, while the US will unveil February inflation figures, foreseen at a record high of 7.8% YoY. Should war fears cool further, the focus will return to skyrocketing inflation and central banks' measures against it. In such a scenario, XAUUSD will have little chance of recovering impetus to near its record high at $2,075.64 a troy ounce. 

The market sentiment began improving on Tuesday as humanitarian corridors to evacuate civilians were put in place. And while the UK and the US announced bans on crude oil imports from Russia, the mood remained upbeat as Ukraine said it would not insist on NATO membership, which triggered some profit-taking on Gold Price. 

On Wednesday, the Russian Ministry of Foreign Affairs Sergei Lavrov said that, due to sanctions, Moscow is diminishing its usage of the US currency in reserves and international settlements, which somehow undermines demand for the greenback across the FX board, and prevents Gold Price from falling further. Also, Russia said it's not trying to overthrow the Ukrainian government, adding to the temporarily positive sentiment.

European stocks traded firmly higher, weighing on the bright metal, which trimmed half of its weekly gains. Gold Price has broken below the $2,000 threshold, as it seems bulls are finally giving up.

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XAUUSD technical outlook

Gold Price is correcting extreme oversold conditions, and there are technical signs that the bullish potential would recede, as the bright metal stands below the 23.6% retracement of this year's rally at $2,001.00, now providing near-term term resistance. The 38.2% Fibonacci retracement of the same rally is at around $1,955, the ultimate support level, as once below it, the risk will skew to the downside.

A new bout of risk aversion could send XAUUSD above $2,025, the immediate resistance level, which will open the door for a retest of the $2,070 price zone. The record high stands at $2,075.64, a level that the bright metal achieved in August 2020.