The metal needs to overcome the 20-DMA in order to see more robust gains
Gold prices have been trading mostly higher this week, but the upside potential looks limited at this stage, in part due to the resurgent strength surrounding the greenback. The US currency derives support from the Fed’s more hawkish tone amid the persistent inflation. The XAUUSD pair bounced off local lows seen around $1,910 earlier in the week, retaining a bullish bias early on Thursday.
The bullion advanced to the 20-DMA that has been capping the upside momentum these days. Should this moving average give up anytime soon, a decisive break above $1,950 would pave the way towards the $1,955 immediate local resistance, followed by the $1,970 zone.
For now, rising US Treasury yields underpin the greenback, thus capping gains in the non-yielding precious metal. Of note, the benchmark 10-year Treasury yield hovered around fresh May 2019 peaks early on Thursday.
However, all depends upon the EU leaders summit and the NATO summit on Ukraine and the upcoming US economic data (including PMIs) due later today. Should the figures disappoint, the buck will come under renewed selling pressure during the North American trading session. In this scenario, the XAUUSD pair could overcome the mentioned moving average, today at $1,950.
Otherwise, the precious metal would be once again rejected from the 20-DMA and could get back below the $1,925 region, followed by this week’s lows around $1,910. Meanwhile, the key short-term support is represented by the $1,900 figure that was briefly derailed last week. As long as the prices stay above this level, bearish risks are limited at this stage. In a wider picture, the bullion stays within a broader uptrend while also holding above the 20-month SMA, currently at $1,827.