China inspires XAU/USD bulls

Being one of the biggest Gold consumers, the recent improvements in China’s headlines activity numbers for February, as well as the 5.0% growth target, appears to underpin the XAU/USD’s latest run-up. It’s worth noting that the chatters surrounding the resumption of the China-US trade negotiations also improved the market sentiment and pleased the Gold buyers.

Alternatively, the US-China tension surrounding Taiwan and Russia seem to flag tensions for the Gold buyers ahead of the key data/events scheduled for this, which in turn can probe the XAU/USD upside.

Gold price technical analysis

Gold price defends the previous day’s successful rebound from the 61.8% Fibonacci retracement level of November 2022 to February 2023 upside.

Adding strength to the upside bias was the metal’s successful closing beyond the 21-DMA for the first time in a month. Furthermore, the Moving Average Convergence and Divergence (MACD) flashed the first bullish signal in a five weeks while the Relative Strength Index (RSI), placed at 14, also crosses the 50 mid-line to suggest strength in the upside momentum.

As a result, the XAU/USD price is likely to continue the latest run-up towards the $1,870 resistance confluence, including the 50-DMA and 38.2% Fibonacci retracement.

It should be noted that the early February’s swing high around $1,890 and the $1,900 threshold could challenge the Gold buyers past $1,870 hurdle, a break of which could direct the bulls towards the 2023 peak surrounding $,1960.

Alternatively, a fresh Gold price weakness needs to break of the 21-DMA support of near $1,844, as well as provide a daily closing below the 50% Fibonacci retracement level of around $1,840 to recall the sellers.

Even so, the XAU/USD bears remain off the table unless the quote remains beyond the 61.8% Fibonacci retracement level close to $1,812, also known as the golden Fibonacci ratio.