Gold Price Forecast: XAUUSD closes in on $2,000 amid Easter Monday thin trading

 

• Gold Price remains poised to recapture $2,000 amid a flight to safety.
• Elevated inflation, recession risks and the Russia-Ukraine war boost safe-haven appeal.
• The speech from Fed Chair Jerome Powell will keep investors busy this week.

Easter Monday-induced thin market conditions are offering some extra zest to bulls, as Gold Price heads closer towards the $2,000 round level. The light trading seems to be exaggerating the moves in XAUUSD, as a 0.50% drop in the US stock futures reflects a risk-off market profile. Persistent Russian military actions in the Western Ukrainian city of Lviv and the Southern port city of Mariupol suggest that a peace agreement is nowhere in sight, fuelling anxiety. Meanwhile, the Ukraine crisis-led surging global inflation is prompting investors to seek refuge in the inflation-hedge Gold Price. Buyers ignore the notable strength in the US dollar alongside the Treasury yields, as a flight to safety makes the traditional store of value, gold, more appealing.

Also read: Gold Price Forecast: XAUUSD needs to crack this level to take on the $2,000 mark

Moreover, China’s covid lockdowns and a potential European Union (EU) embargo on Russian gas could likely intensify inflation and growth concerns. This was seen as another factor that boosted the metal's appeal as a hedge against rising costs. Investors will now focus on the speech from the St. Louis Fed President and FOMC member James Bullard, which will provide insights into the likely monetary policy action by the Fed. However, the mega event will be the speech from Fed Chair Jerome Powell due later this week.

“We are of the view that the Fed is broadly in-sync with the move toward the vicinity of neutral by the end of 2022, with Governor Brainard supporting that view recently. Chair Powell's remarks in an IMF panel on the global economy will get the focus of the attention,” analysts at TD Securities explained. “While the Fed is signalling its intent to reach neutrality by year-end, and to start an aggressive QT regime, outflows from gold markets have been scarce as participants are happy to retain some optionality against the Fed's stated plan amid growth concerns,” the analysts added.

Gold Technical Analysis

The bulls are in control and taking on fresh highs. On a daily scale, XAU/USD has tested the breakout of its previous critical level at March 24 high $1,966.18 multiple times. The 20- and 50-Exponential Moving Averages (EMAs) are scaling higher, adding to the upside filters. The momentum oscillator Relative Strength Index (RSI) (14) has overstepped 60.00, which indicates a firmer bullish momentum going forward.