After a slight drop on Good Friday, gold bulls reclaimed control on Easter Monday, sending the XAUUSD to its highest level in five weeks at $1,989. The gold price is determined to reclaim the $2,000 psychological threshold as investors seek refuge in the ultimate safe haven amid a lengthy Russia-Ukraine war-led elevated inflation levels, signaling chances of a recession. Despite an increase in US Treasury yields across the curve, the flight to safety theme remains dominant, as markets appear to have already priced in a 50-bps Fed rate hike in May.

Meanwhile, investors dismiss the bullish Chinese Q1 2022 GDP statistics, with the YoY rate above expectations at 4.8 percent. China’s commodity lockdowns and a potential European Union (EU) embargo on Russian gas are likely to exacerbate inflation and growth concerns, bode well for the gold price. However, holiday-thinned market circumstances and Fedspeak will impact GOLD price behavior in the coming sessions.

During the American session, investors will pay close attention to St. Louis Fed President and FOMC member James Bullard’s speech, which will provide insight into the Fed’s expected monetary policy action. The big event will be Fed Chair Jerome Powell’s speech, which is scheduled for later this week.

“We believe the Fed is substantially in accord with the path toward neutral by the end of 2022, with Governor Brainard recently reinforcing that view. “The focus will be on Chair Powell’s statements in an IMF panel on the global economy,” analysts at TD Securities explained.

“While the Fed has signaled its intention to reach neutrality by the end of the year and to begin an aggressive QT regime, outflows from gold markets have been rare as participants seem glad to preserve some flexibility against the Fed’s stated goal amid growth concerns,” the analysts added.

Meanwhile, even though it is day 50 of the Ukraine conflict, there is still no evidence of progress in the two countries’ peace talks. According to Reuters, Ukrainian Foreign Minister Dmytro Kuleba stated that there had been no recent diplomatic communications between Russia and Ukraine at the level of their foreign ministries and that the situation in Mariupol, which he described as “dire,” may be a “red line” in the path of negotiations.

Gold (XAU/USD) Technical Outlook

The bulls are in command and setting new highs. On a daily basis, XAU/USD has repeatedly attempted the breakout of its prior crucial level at the March 24 high of $1,966.18. The 20- and 50-day Exponential Moving Averages (EMAs) rise, adding to the upward filters. The momentum oscillator Relative Strength Index (RSI) (14) has surpassed 60.00, indicating a stronger bullish momentum in the future.

On Monday, the precious metal gold was trading with a bullish bias at $1,984 after rebounding from the 1,968 support level. Candles above this level can drive a further uptrend until 2,000 or even 2,009 levels. At the same time, the support level continues to hold at $1,968 and $1,944. The RSI and MACD are also in support of an uptrend. Therefore, consider looking for buying trades above $1,968 and vice versa. Good luck!