Gold Price Forecast: XAU/USD corrects after struggling to find acceptance above $2,000 mark.

Gold shot to a one-and-half-year high on Monday, albeit struggled to find capitalize on the move.A blowout USD rally acted as a headwind for the metal amid modest recovery in the risk sentiment.A further escalation in the Russia-Ukraine war should help limit any meaningful corrective pullback.

Gold added to last week’s strong gains of over 4% and kicked off the new week on a positive note amid the global flight to safety. In a further escalation of the Russia-Ukraine war, Russian jets continued to drop bombs near the Ukrainian capital Kyiv. Moreover, Russian President Vladimir Putin warned that the war in Ukraine would continue. This, in turn, triggered a fresh leg down in the equity markets and boosted demand for traditional safe-haven assets, including the XAU/USD. The momentum pushed spot prices to the highest level since August 2020, though bulls struggled to capitalize on the move or find acceptance above the key $2,000 psychological mark.

The risk sentiment stabilized after Russia announced that it will hold fire and open six humanitarian corridors to allow civilians to escape. This, along with an extension of last week’s blowout US dollar rally, acted as a headwind for the dollar-denominated gold. The worsening situation in Ukraine has led to the recent monster gains in commodity prices and stoked fears of a major inflationary shock for the global economy. This benefited the greenback’s status as the reserve currency and pushed it to levels not seen since May 2020. Apart from this, news that the third round of Russia-Ukraine ceasefire talks is set to start at 14:00 GMT forced the XAU/USD to pare its intraday gains.

From a technical perspective, overbought RSI (14) on daily/weekly charts seemed to be the only factor that held back bullish traders from placing fresh bets. Hence, it will be prudent to wait for some near-term consolidation or modest pullback before positioning for the next leg up. In the meantime, the $2,000 round-figure mark might continue to act as immediate resistance. Sustained strength beyond should pave the way for a move towards retesting 2020 swing high, around the $2,075 region.

On the flip side, weakness below the $1,871-$1,870 area is likely to be short-lived and find decent support near the $1,850 region. The latter should act as a strong base for spot prices, which if broken decisively might prompt some long-unwinding trade. Gold could then slide to the $1,927-$1,925 region en-route the next relevant support near the $1,910 area and the $1,900 round-figure mark.

EUR/USD extends recovery from 22-month lows, trades near 1.0900.EUR/USD reversed its direction after dropping toward 1.0800 earlier in the day and recovered to the 1.0900 area. The positive shift witnessed in market sentiment seems to be making it difficult for the greenback to preserve its strength while fueling EUR/USD’s rebound. Eyes on the third round of Russia-Ukraine talks.EUR/USD News .Gold extends slide from multi-month highs, trades near $1,970.Gold climbed to its strongest level since August 2020 above $2,000 on Monday but lost its traction heading into the American session. XAU/USD was last seen trading near $1,970, pressured by a more-than-3% increase in the benchmark 10-year US Treasury bond yield.

Gold News .GBP/USD recovers to 1.3200 area as dollar rally loses steam.With the greenback struggling to preserve its strength during the European trading hours, the GBP/USD pair rose toward 1.3200 and erased a large portion of its daily losses. In the absence of high-tier data releases, investors stay focused on geopolitics.

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