- Summary:
- Gold price hovers near $2,900 as traders eye US-Russia talks and Fed signals. Can XAU/USD break resistance, or will a strong USD cap gains?
Gold (XAU/USD) is currently treading water near $2,900, struggling to extend its recent rebound as investors turn cautious ahead of high-stakes US-Russia talks in Saudi Arabia. Despite the possibility of a Russia-Ukraine peace deal, uncertainty looms as the discussions exclude Ukraine and European leaders, raising concerns about geopolitical risks.
Additionally, the US Dollar’s broad-based recovery and hawkish Federal Reserve commentary have limited gold’s upside, with traders now closely monitoring upcoming speeches from Fed officials Mary Daly and Michael Barr, along with the release of the Fed’s January meeting minutes.
US-Russia Talks and Gold’s Safe-Haven Appeal
Top US and Russian delegates are set to discuss the Ukraine war, but markets remain cautious about any major breakthrough. While an agreement could ease geopolitical risks, the exclusion of Ukraine and Europe from the talks raises concerns about its effectiveness.
- French President Emmanuel Macron held an emergency summit on Ukraine, highlighting tensions over Europe’s role in the negotiations.
- A failed outcome from the talks could reignite risk aversion, boosting gold’s safe-haven demand.
- A peace deal, on the other hand, could weaken gold prices, shifting investor focus to economic fundamentals.
Federal Reserve Outlook and the US Dollar’s Strength
The Federal Reserve’s cautious stance on inflation has contributed to the recent rebound in the US Dollar (USD), pressuring gold’s upside.
- Fed Governor Michelle Bowman stated that rising asset prices may have slowed inflation progress.
- Fed Governor Christopher Waller noted that inflation is still too high for immediate rate cuts.
- Philadelphia Fed President Patrick Harker signaled that the current economic conditions favor a steady policy stance.
With traders awaiting more Fed speeches and meeting minutes, gold’s next move could be influenced by fresh policy hints and US Treasury yields.
Gold Price Technical Outlook: Can Bulls Push XAU/USD Higher?
Gold is struggling to hold above $2,900, facing resistance while momentum indicators signal caution.
- Resistance Levels: $2,909, $2,943, $2,970
- Support Levels: $2,864, $2,850, $2,830 (21-day SMA)
- RSI: 69.20 – Near overbought territory, indicating consolidation
- MACD: Bullish, but momentum is fading
If gold fails to hold $2,900, sellers could test the February low of $2,864, with further downside opening the door to $2,850. However, a breakout above $2,909 could drive XAU/USD toward the record high of $2,943, with the next major target at $2,970.
Conclusion: Gold’s Next Move Hinges on US-Russia Talks and Fed Signals
Gold’s rally is at a crossroads, with geopolitical risks and Federal Reserve policy expectations shaping sentiment. If the US-Russia talks fail to produce meaningful results, gold could see fresh safe-haven demand. However, a strong US Dollar and hawkish Fed commentary could cap gains.
Traders should watch $2,900 as the pivot level, with a breakout above $2,909 needed to confirm a bullish continuation.