Gold price regains some positive traction amid geopolitical risks and subdued USD demand.

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• Gold price regains some positive traction amid geopolitical risks and subdued USD demand.
• The Fed’s hawkish outlook remains supportive of elevated US bond yields and caps gains.
• A sustained strength beyond the 50-day SMA is needed for bulls to seize near-term control.

Gold price (XAU/USD) trades with a mild positive bias during the Asian session on Friday, albeit lacks follow-through and remains below a nearly two-week high touched the previous day. The minutes of the late January FOMC meeting, along with the recent comments by influential Federal Reserve (Fed) officials, suggested that the central bank is in no hurry to cut interest rates. This remains supportive of elevated US Treasury bond yields, which, along with an extension of the risk-on rally across the global equity markets, turn out to be key factors acting as a headwind for the non-yielding yellow metal.

The downside for the safe-haven Gold price, however, remains cushioned amid the risk of a further escalation of geopolitical tensions in the Middle East. Moreover, the US Dollar (USD), so far, has been struggling to gain any meaningful traction despite the Fed’s hawkish outlook and could further lend support to the commodity in the absence of any relevant market-moving economic releases. Nevertheless, the XAU/USD seems poised to register modest gains for the first time in three weeks, though the aforementioned fundamental backdrop warrants some caution before placing aggressive bullish bets.

From a technical perspective, the 50-day SMA, currently pegged near the $2,032 area, followed by the $2,035 region, or a nearly two-week high touched on Thursday, could act as an immediate hurdle. Given that oscillators on the daily chart have just started gaining positive traction, a sustained strength beyond the said barrier has the potential to lift the Gold price towards the $2,044-2,045 intermediate resistance en route to the $2,065 supply zone.

On the flip side, the $2,020-2,019 area now seems to have emerged as an immediate support. This is followed by the 100-day SMA, around the $2,000 psychological mark, which if broken decisively will expose the monthly low, around the $1,984 region. The subsequent downfall could drag the Gold price further towards challenging the very important 200-day SMA support near the $1,966-1,965 zone.

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