Gold price meets with a fresh supply on Monday and snaps a two-day winning streak.

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• Gold price meets with a fresh supply on Monday and snaps a two-day winning streak.
• Reduced bets that the Fed will cut rates in March act as a headwind for the XAU/USD.
• Retreating US bond yields, softer USD and geopolitical risk could limit deeper losses.

Gold price (XAU/USD) kicks off the new week on a weaker note and stalls a two-day-old recovery trend from the vicinity of the $2,000 psychological mark, or over a one-month low touched last Wednesday. The incoming US macro data, including Friday’s upbeat consumer sentiment index, suggested that the economy is in good shape. Adding to this, the recent hawkish comments from a slew of influential Federal Reserve (Fed) policymakers lowered market expectations of an early rate cut. This, in turn, is seen as a key factor driving flows away from the non-yielding yellow metal.

Apart from this, a generally positive tone around the equity markets further contributes to the offered tone surrounding the Gold price. That said, the risk of a further escalation of geopolitical tensions in the Middle East, along with persistent worries about slowing economic growth in China, could lend some support to the safe-haven XAU/USD. Moreover, the flight to safety exerts some pressure on the US Treasury bond yields, which keeps the US Dollar (USD) bulls on the defensive. This, in turn, should help limit any further losses for the precious metal, warranting caution for bearish traders.

From a technical perspective, some follow-through below the $2,022-2,020 immediate support will expose the $2,000 psychological mark, or over a one-month low touched last week. The latter should act as a key pivotal point, which if broken decisively could make the Gold price vulnerable. The subsequent downfall has the potential to drag the XAU/USD further towards the $1,988 intermediate support en route to the 100-day Simple Moving Average (SMA), currently around the $1,972 area and the 200-day SMA, near the $1,964-1,963 region.

On the flip side, Friday’s swing high, around the $2,040-2,042 supply zone, might continue to act as an immediate strong barrier. A sustained strength beyond could trigger a short-covering rally and lift the XAU/USD towards the $2,077 area. The upward trajectory could extend further and allow bulls to reclaim the $2,100 round-figure mark.

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