GOLD:FUNDAMENTAL NEWS+TECHNICAL SETUP | SHORT CONTINUATION 🔔

Gold Price Forecast: XAU/USD’s path of least resistance appears down, Ukraine updates eyed

Gold bulls try their luck but upside attempts appear limited amid cautious optimism.
DXY eases with yields while weaker oil prices, China’s covid support buoys sentiment.
Gold price breaches key daily support, Ukraine updates could revive the dollar’s demand.
Gold price kicked off a new week on a bearish note on Monday, as it tumbled nearly $35 after failing to resist above the $1,950 psychological level. The demand for the US dollar-dominated amid multiple factors, weighing negatively on the USD-denominated gold. Risk-aversion hit investors hard after mainland China's CSI300 share index plunged almost 10% as the 26-million population of Shanghai went into a 2-stage lockdown on rising coronavirus cases. Therefore, the greenback benefited from the safe-haven flows at gold’s expense. Chinese covid lockdown triggered a fresh sell-off in oil prices, reducing gold’s appeal as a hedge against inflation. Moreover, the relentless surge in the US Treasury yields, amid expectations of a 50-bps May Fed rate hike, deepened the pain in the non-yielding gold price. Another factor that could be linked to the turmoil in gold price was the hopes for progress in peace talks, as Russia and Ukraine negotiators were set to meet in Turkey for a one-on-one meeting.

Gold price is making a minor recovery attempt this Tuesday, having found support just above the $1,920 barrier. Shanghai city rolled out economic measures to support the local firms, as lockdown bites. This helped improve the market mood, as the US dollar struggles amid a retreat in the yields across the curve. However, investors remain edgy amid slim chances of a meeting between the Russian and the Ukrainian leaders while cease-fire talks will likely continue. The developments surrounding the two warring nations will likely lead the market sentiment, especially after the Kremlin called US President Biden's apparent call for regime change in Moscow "a cause for concern". Meanwhile, Ukraine’s President Volodymyr Zelensky made his offer for future neutrality in return for peace.