GOLD PRICE FORECAST: XAU/USD HESITATES BELOW $2,010 DESPITE USD RETREAT, HAWKISH FED CONCERNS LINGER

Gold price (XAU/USD) seesaws around $2,005 as it struggles for clear directions amid sluggish trading early Monday morning in Europe.

The bright metal marked the first daily loss in four the previous day, as well as posted the biggest daily loss in three weeks, as the US Dollar posted a corrective bounce off a one-year low. Adding strength to the XAU/USD inaction could be the mixed catalyst surrounding the US Federal Reserve (Fed) and the geopolitical fears amid a light calendar for the day, as well as for the week.

That said, a wider-than-expected fall in US Retail Sales failed to supersede upbeat figures from the US Industrial Production and University of Michigan's (UoM) Consumer Confidence Index and allowed the US Dollar to rebound. Not only the data but hawkish comments from the Fed policymakers also enabled the greenback to pare the previous losses. Amid these plays, the CME’s FedWatch tool suggests an almost certain case of the US central bank’s 0.25% rate hike in May. That said, the interest rate futures also tame the odds of the rate cuts in late 2023, as well as support the longer halt to the rate hike trajectory after the upcoming rate lift.

On the contrary, fears surrounding China’s ties with Russia and the resulting geopolitical tension, as well as the recent retreat in the US Treasury bond yields weigh on the Gold price.

Amid these plays, the S&P 500 Futures print 0.20% intraday gains as it reverses the previous day’s pullback from the highest levels since early February around 4,172. That said, the US 10-year and two-year Treasury bond yields pare the previous week’s 3.0% gains with minor losses around 3.52%% and 4.11% respectively.

Looking forward, the Gold price may remain sluggish ahead of Tuesday’s China GDP, which in turn can allow the XAU/USD to witness a pullback in case of downbeat growth numbers from the world’s biggest Gold consumers. Following that, Friday’s preliminary readings of US PMIs for April will be important for clear directions.