Gold Price Forecast: XAU/USD licks its wounds near $1,840 within falling wedge amid sluggish markets

• Gold price remains sidelined after three-week downtrend, picking up bids of late.
• Geopolitical fears fail to weigh on XAU/USD price amid absence of US, Canadian traders.
• Headlines surrounding North Korea, China will be crucial for fresh impulse, Fed Minutes become the key.

Gold price (XAU/USD) grinds higher around intraday top, reversing the early-day losses, as the US Dollar bulls take a breather amid the US holiday on Monday. In doing so, the yellow metal snaps three-week downtrend amid the inactive markets heading into European session.

US Dollar Index (DXY) retreats from intraday high but stays mildly bid near 104.00 following a three-week winning streak. The greenback’s gauge versus six major currencies previously cheered upbeat US Treasury bond yields and upbeat US data but mixed comments from the Federal Reserve (Fed) officials seemed to have weighed on the Gold price on Friday.

Recently, Japanese Prime Minister (PM) Fumio Kishida pushes for an emergency United Nations (UN) Security Council meeting amid growing fears from North Korea after the hermit kingdom fired two ballistic missiles towards Tokyo, both of which landed outside Japan's EEZ.

On the same line is the failure of the latest meeting between US Secretary of State Antony Blinken and China's top diplomat Wang Yi seemed to restore US-China ties. The reason could be linked to a Chinese diplomat’s comments saying that the US must change course and repair the damage done to Sino-US ties by indiscriminate use of force.

It should be noted that the People’s Bank of China’s (PBOC) inaction joins the holidays in the US and Canada to restrict XAU/USD moves.

Amid these plays, the S&P 500 Futures print mild losses even as Wall Street closed mixed. It’s worth noting that the US 10-year Treasury bond yields rose to the highest levels since early November in the last week and helped the DXY to print a three-week uptrend.

Moving ahead, a light calendar and absence of the key players can keep restricting immediate XAU/USD momentum. Even so, headlines surrounding Russia, China and North Korea will be crucial for intraday directions. Following that, Wednesday’s Federal Open Market Committee (FOMC) Meeting Minutes will be crucial to watch.

Gold price technical analysis

Gold price grinds near the top line of the two-week-old falling wedge bullish chart formation, following a successful bounce off a two-month-old horizontal support area.

The corrective bounce also takes clues from the bullish MACD signals and firmer RSI (14), not overbought.

As a result, confirmation of the bullish pattern, with an upside break of $1,845 hurdle, appears more likely an outcome. Following that, 200-SMA level surrounding $1, 892 and the $1,900 threshold could challenge the XAU/USD bulls during the theoretical run-up towards $1,945.

Alternatively, the aforementioned horizontal support area near $1,823-22 precedes the stated falling wedge’s lower line, close to $1,819, to restrict short-term downside of the Gold price.

In a case where the XAU/USD remains weak past $1,819, the odds of witnessing a slump towards $1,819 can’t be ruled out.

Gold: Four-hour chart

Trend: Further downside expected