Gold Price Forecast: XAU/USD volatile, between stronger Dollar and lower Treasury yields

Is Gold Ready to Shine Again? US CPI and Fed Policy Insights
  • Gold rebounds despite a stronger US Dollar.
  • Falling US Treasury yields are helping the yellow metal.
  • XAU/USD remains under the 20-day SMA, keeps avoiding daily close under $1.980.

Gold price rebounded sharply during the last hour, rising more than $10. XAU/USD bottomed at $1,975 and then jumped to $1,994. As of writing, it trades at $1,987 marginally lower for the day, on a volatile session. Despite the big swings, price remains in a recent familiar range.

Gold price rebound is losing momentum as the US Dollar prints fresh daily highs across the board. The DXY is up by 0.35%, trading at 101.70. At the same time, US Treasury yields are falling again. The US 10-year yields stands at 3.43% and the 2-year at 4.03%, both at two-week lows.

The combination of a stronger US Dollar and lower Treasury yields is favoring large swings in XAU/USD. Incoming economic data from the US, particularly Q1 GDP and consumer inflation on Thursday, could add fuel to volatility.

On a wider perspective, Gold is showing some signs of weakness as it remains below the 20-day Simple Moving Average (SMA) which stands near $2,000. At the same time, it has avoided a daily close under $1,980. A close under the mentioned level would point to an extension of the bearish correction.

Is Gold Ready to Shine Again? US CPI and Fed Policy Insights

FXStreet News

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market and was founded in 2000.
 
The website offers a wide range of tools and resources: 24/5 currency news, real-time economic calendar, advanced rates and charts, educational webinars, analysis reports, forecasts, Learning Center, newsletters, industry services, FX customizable studies...
 
As its distinctive trademark, the portal has always been proud of its unyielding compromise to provide neutral and unbiased information and to enable its users to take better and more confident decisions. FXStreet has managed to gain the collaboration of the entire Forex industry, from individual professionals and small companies right up to Forex Brokers and Investment Banks. FXStreet covers the FX Market 24/5: an expert team of journalists, traders and economists picture what the market is doing and what is happening as it happens.