Gold Price Forecast: XAU/USD grinds within bullish channel despite easy United States Treasury yields, Dollar

• Gold price grinds higher after snapping two-day losing streak the previous day.
• Softer United States data contrasts with upbeat China statistics to underpin XAU/USD rebound.
• US Treasury bond yields, US Dollar bear the burden of downbeat data, anxiety ahead of United States debt ceiling plan.
• Gold buyers need support of risk-on mood to refresh YTD high.

Gold price (XAU/USD) stays defensive around $2,005 amid sluggish Wednesday morning in Asia. In doing so, the XAU/USD bulls reassess the latest catalysts that helped the Gold price snap a two-day downtrend as market sentiment dwindles due to mixed signals and a cautious mood ahead of an important event. Even so, downbeat US Dollar and United States Treasury bond yields put a floor under the commodity’s price.

Gold price cheers softer United States Treasury bond yields, US Dollar

Gold price managed to post the first daily gains in three as downbeat United States Treasury bond yields joined the US Dollar weakness amid softer US data. That said, the US Dollar Index (DXY) reverses the previous rebound from a one-year low while printing the second daily loss in four. The greenback’s gauge versus six major currencies tracks downbeat yields to take a U-turn the previous day. That said, the US 10-year and two-year Treasury bond coupons dropped for the first time in four days by the end of Tuesday, sluggish around 3.59% and 4.21% by the press time.

Softer US data supersede hawkish Federal Reserve talks to propel XAU/USD price

Talking about the United States data, the US Housing Starts and Building Permits roiled the mood with downbeat prints for March on Tuesday. That said, the Housing Starts eased to 1.42M versus 1.432M prior and 1.40M market forecasts whereas the Building Permits dropped to 1.413M from 1.55M previous readings and analysts’ estimations of 2.2M. It’s worth noting that the NY Empire State Manufacturing Index and the US National Association of Home Builders (NAHB) housing market index marked upbeat prints on Monday and allowed the US Dollar buyers to remain firmer.

On the contrary, comments from the Federal Reserve (Fed) Officials have been hawkish of late. On Tuesday, St. Louis Federal Reserve President James Bullard said, in an interview with Reuters, “Interest rates will need to continue to rise in the absence of clear progress on inflation.” On Monday, Richmond Fed President Thomas Barkin said that he wants to see more evidence of inflation settling back to target. Recently, Atlanta Fed President Raphael W. Bostic who recently mentioned that the economy is still gaining momentum, but inflation is too high.

Hence, the downbeat US data supersedes the hawkish Fed talks and propel the Gold price.

Upbeat China statistics, market’s indecision keeps Gold buyers hopeful

Talking about the United States data, the US Housing Starts and Building Permits roiled the mood with downbeat prints for March on Tuesday. That said, the Housing Starts eased to 1.42M versus 1.432M prior and 1.40M market forecasts whereas the Building Permits dropped to 1.413M from 1.55M previous readings and analysts’ estimations of 2.2M. It’s worth noting that the NY Empire State Manufacturing Index and the US National Association of Home Builders (NAHB) housing market index marked upbeat prints on Monday and allowed the US Dollar buyers to remain firmer.

On the contrary, comments from the Federal Reserve (Fed) Officials have been hawkish of late. On Tuesday, St. Louis Federal Reserve President James Bullard said, in an interview with Reuters, “Interest rates will need to continue to rise in the absence of clear progress on inflation.” On Monday, Richmond Fed President Thomas Barkin said that he wants to see more evidence of inflation settling back to target. Recently, Atlanta Fed President Raphael W. Bostic who recently mentioned that the economy is still gaining momentum, but inflation is too high.

Hence, the downbeat US data supersedes the hawkish Fed talks and propel the Gold price.

Gold price technical analysis

Gold price remains firmer inside a one-month-old ascending trend channel, recently bouncing off the 100-bar Simple Moving Average (SMA).

In addition to the bullish chart formation, the looming bull cross on the Moving Average Convergence and Divergence (MACD) indicator, as well as the upward-sloping Relative Strength Index (RSI) line, placed at 14, also keeps XAU/USD buyers hopeful.

However, multiple hurdles around $2,030 and the aforementioned channel’s top line, close to $2,053 by the press time, could challenge the Gold price upside ahead of directing the bulls towards the previous yearly top of $2,070.

Following that, the record top of $2,075, marked in 2020, will be in the spotlight.

Meanwhile, the 100-SMA and bottom line of the stated channel, close to $1,993 and $1,982 in that order, restrict short-term Gold price downside ahead of the 200-SMA support of near $1,947.

It should be noted that the XAU/USD’s weakness past 200-SMA makes it vulnerable to drop toward the previous monthly low, around $1,809.

Gold price: Four-hour chart

Trend: Further upside expected