The gold price [[XAUUSD]] is attempting to rise and is approaching the recent highs set on Wednesday near $1,980. The US dollar is lagging on Thursday after falling overnight as US yields paused their rally, providing some relief to the forex market as investors await the European Central Bank’s decision.

Another slew of US inflation data arrived on Wednesday. Producer prices, also known as the Producer Price Index (PPI), added further pressure on the Federal Reserve to raise interest rates in March, rising by 11.2 percent year on year, higher than expected and the most significant increase since 2010. Simultaneously, the so-called core PPI, which excludes volatile items, increased 9.4 percent year on year, exceeding the 8.4 percent forecast.

Now that the US inflation data is in the rearview mirror, the hot inflation that has surrounded the US economy strengthens the case for the Federal Reserve to raise interest rates aggressively. Fed officials have indicated that a 50-bps rate hike is possible at the May meeting, while STIRs predict a 0.50 percent increase in the Federal Funds Rate (FFR).

Fed Governor Christopher Waller (voter in 2022) crossed the wires late in the US session. Waller stated that the data supports 50 basis point increases and that he prefers to front-load aggressive hikes at the May meeting, with possibly more in June and July. He stated that he hopes to be above neutral by the end of the year.

Along with falling US Treasury yields, geopolitics is another reason why investors are buying gold, with the latest updates on the Russo-Ukraine war indicating that peace is still a long way off.

Russia will consider US and NATO vehicles transporting weapons on Ukrainian territory to be legitimate military targets, Russia’s Deputy Foreign Minister said on Wednesday, escalating tensions with the West. The latest volley of Kremlin rhetoric comes after Putin declared on Tuesday that peace talks with Ukraine had reached a stalemate.

Gold (XAU/USD) Technical Outlook

Gold price is hovering around the intraday bullish channel’s resistance, hampered by Stochastic negativity that impedes the mission of continuing the rise. It is waiting for a positive motive to assist in pushing the price to our main expected target of $2000.

Until now, the bullish trend scenario remains valid and active for the upcoming period, supported by the EMA50, reminding you that it is critical to maintain above $1960.00 to continue the expected rise. Today’s trading range is expected to be between $1950.00 support and $2000.00 resistance.