Gold Price Forecast: XAU/USD extends weekly gains hovers around $1920 post-ISM Manufacturing PMI

• US ISM Manufacturing PMI for February is still in expansionary territory and came better than expected.
• US ISM New Orders reached a five-month high.
• Despite positive economic data in the US, market sentiment remains the main driver for XAU/USD.
• XAU/USD Technical Outlook: Neutral upward biased and dependant on investors’ mood.

Gold (XAU/USD) rises for the second consecutive day, above the $1900 mark so far, and will likely remain higher as geopolitical tensions persist. Ukraine – Russia conflict does not appear to end in the short term, despite the first round of talks between Ukraine – Russia officials on Monday. At the time of writing, XAU/USD is trading at $1926.

US ISM Manufacturing advances firmly, and new Orders reached a five-month high

The US economic docket featured the first tranche of data in the week. The ISM Manufacturing PMI for February rose to 58.6, higher than the 58 estimated by analysts. ISM’s new orders advanced close to four months, reaching a five-month high of 61.7.

“The US manufacturing sector remains in a demand-driven, supply chain-constrained environment,” Timothy Fiore, chair of ISM’s Manufacturing Business Survey Committee, commented in the report. The omicron variant “remained an impact in February; however, there were signs of relief, with recovery expected in March.”

Furthermore, the ISM Price Index for the same period rose to 75.6, higher than estimations but lower than January 76.1, easing price pressures.

Market sentiment stays in the driver’s seat

Investors’ mood remains depressed. European and US equity indices extend losses, while safe-haven currencies remained bid in the FX space, except for rising peers linked to commodities, like the AUD, CAD, and NZD.

Read more:  Silver Price Forecast: XAG/USD bull’s eye $25.00 as Ukraine/Russia war extends – War update.

Meanwhile, the US Dollar Index, a gauge of measurement of the greenback’s value, is up close to 0.50%, sitting at 97.21, despite falling US Treasury yields. The US 10-year T-note plunges 12 basis points, at 1.719%, weighing on the USD value against the yellow metal.

Therefore, gold would remain firmly upwards unless geopolitical conditions improve, meaning a ceasefire and peace talks between Ukraine and Russia.

XAU/USD Price Forecast: Technical outlook

XAU/USD is upward biased, pressuring February 28 high at $1927.48. If XAU bulls defend the June 1, 2021 high, resistance-turned-support at $1916.61, they could remain hopeful of attacking the $2000 mark.

If that scenario plays out, XAU/USD’s first resistance would be October 12, 2020, high at $1933.29. Breach of the latter would expose January 6, 2021, high at 1959.40, and February 24 YTD high at $1974.48.