• Gold price clings to gains above the 20-day EMA, boosted by risk aversion.
• Mixed data in the United States suggests that the economy is slowing.
• XAU/USD Price Analysis: Downside expected beneath $2000., with sellers eyeing $1950.

Gold price advanced and printed a new weekly high at around $2003, though it faltered to hold its gains above the $2000 mark. Deteriorated risk appetite sponsored by fears around the United States (US) banking system, increased flows to safe-haven assets. Therefore, the XAU/USD climbs 0.41%, trading at $1997.10, after hitting a low of $1976.26.

Sentiment takes a hist on First Republic Bank. US Consumer confidence drops and New Home Sales, advanced

Wall Street finished the session with losses. Investors’ woes about First Republic Bank admitting a loss of $100 billion worth of deposits in Q1 2023 reignited worries of a spread contagion around the system. Another tranche of US economic data revealed earlier witnessed Consumer Confidence sliding to a level last seen in July 2022, at 101.3, vs. expectations of 104.0, and New Home Sales in March rising, 9.6% MoM, exceeding estimates of 1.1%.

On other data, the Dallas Fed Services Index dropped to -14.4 in April, an improvement compared to March’s -18, while the Richmond Fed Indices, both readings plunged, a signal that the economy is decelerating.

Despite all that, the greenback slightly capped the XAU/USD’s rally. The US Dollar Index (DXY), a gauge of the buck’s value vs. a basket of six currencies, edges high 0.55%, at 101.872, although US Treasury bond yields continued to tumble.

That comes as speculations of a Federal Reserve (Fed) rate hike for May, had diminished, as reported by the CME FedWatch Tool. Odds for a 25 bps lie at 74.7%, less than Monday’s 90.5% chance, as reflected by US bond yields. However, investors have begun discounting two 25 bps rate cuts by the year’s end, as shown by the CME probabilities table.

XAU/USD Technical Analysis

Gold remains supported by the 20-day Exponential Moving Average (EMA) at $1989.07, a dynamic demand zone from which XAU/USD has bounced. The XAU/USD uptrend is intact, and further upside is expected as the Relative Strength Index (RSI) bounces off the 50 levels and aims toward the 60 level. Moreover, the Rate of Change (RoC) indicates sellers are losing momentum. That said, the XAU/USD path of least resistance is upwards. The XAU/USD first resistance would be the $2000 mark. A breach of the latter and Gold could climb towards the April 5 swing high at $2032.13, followed by the YTD high at $2048.79.