Gold Price Forecast: Lower lows hinting at a steeper decline

• Market players are trying to assess the latest on the Eastern Europe crisis.
• The US Federal Reserve will announce its monetary policy decision later in the week.
• XAUUSD is trading at the lower end of its latest range and is poised to extend its slump.

Gold Price is bouncing from a fresh one-week low of $1,954.17 a troy ounce, still firmly down for the day. The bright metal came under selling pressure amid a better perception of risk throughout the first half of the red, as market participants were betting on a diplomatic solution for the Ukraine-Russia crisis. The better mood, however, suffered a setback following the news coming from Russia, as a Kremlin spokesperson noted that Moscow is determined to fulfil its plan on Ukraine.

Demand for XAUUSD returned, although modestly, with spot now trading at around $1,965 a troy ounce, still down for the day. Meanwhile, stocks traders are holding on to modest hopes. European indexes have trimmed part of their intraday gains but keep trading in the green, while US indexes are poised to start the day with modest losses.

Additionally, speculative interest is keeping an eye on soaring government bond yields amid the Federal Reserve monetary policy announcement next Wednesday. US inflation has reached a 40-year high of 7.9% YoY in February, spurring the supposition of a 50 bps rate hike. Higher yields and rates are benefiting the greenback to the detriment of Gold Price.

Also read: The great commodities supercycle of 2022 continues to break new records – What’s next?

XAUUSD Technical outlook

Gold Price is hovering around the 38.2% retracement of its January/March rally, where it bottomed twice in the previous week. It is down for a second consecutive day, and technical readings hint at further declines, mainly on a break below the aforementioned daily low. The next relevant support is the 50% retracement of the same advance at $1,925.20 a troy ounce.

XAUUSD has no technical signs of an upcoming recovery, although it could happen should hopes for a diplomatic solution revive. The next Fibonacci resistance level is located at around $2,000, while in the middle, the bright metal may meet sellers at around $1,981, March 8 daily low.