GOLD PRICE FORECAST: XAU/USD BEARS POKE $1,805 AS FED’S POWELL PROPELS YIELDS – CONFLUENCE DETECTOR

Gold price takes offers to refresh one-week low, prints three-day downtrend.

Fed Chair Powell backs “higher for longer” rate concerns, bolsters US Treasury bond yields.

Gap between 10-year and two-year US bond coupons turn the widest since 1981.

US-China headlines, Powell’s Testimony 2.0 and US job numbers are the key for further XAU/USD directions.

Gold price (XAU/USD) drops for the third consecutive day as it drops to the lowest level in one week amid a broad US Dollar strength. It’s worth noting that the yellow metal dropped the most in a month the previous day after Federal Reserve (Fed) Chairman Jerome Powell surprised traders on Tuesday by showing readiness for more rate hikes and bolstered the bets of a 50 bps Fed rate hike in March. The policymaker propelled the “higher for longer” Fed rate expectations and bolstered the US Treasury bond yields while weighing on the XAU/USD.

That said, the US 10-year Treasury bond yields rose 0.15% while closing around 3.97% on Tuesday but the two-year counterpart gained 2.60% on a day when poking the highest levels since 2007, to 5.02% at the latest. With this, the yield curve inversion widened the most in 42 years and drowned the Gold price. Apart from the Fed and bond market plays, the Sino-American tension over Taiwan and the recent US upbeat data also exert downside pressure on the XAU/USD price.

Moving on, Fed Chair Powell’s second round of testimony and the US ADP Employment Change, the early signal for Friday’s US Nonfarm Payrolls (NFP), will be crucial for clear directions.

Also read: Gold Price Forecast: XAU/USD set for more pain if key $1,805-$1,800 support zone fails