Gold price reclaims 21-Day Moving Average, extending recovery

The gold price is holding to recovery gains, hoping to prolong the uptrend for the third day in a row on Wednesday. Despite the newfound confidence around the gold price. Bulls continue to struggle at about the $2,000 psychological level. Despite the recent gain in the US Dollar (USD). On Tuesday, risk-aversion was the name of the game. As concerns about the US banking sector resurfaced after the troubled First Republic Bank shares fell 50%. After falling over 20% after market hours on Monday. After it said customer deposits fell by $102 billion and borrowed $92 billion in the first quarter.

Moreover A flight-to-safety theme prevailed, reviving safe-haven demand for the US Dollar and US government assets while crushing US Treasury bond rates throughout the curve. On Tuesday, the benchmark 10-year US Treasury bond yield fell by nine basis points (bps), while the rate-sensitive two-year Treasury bond yield fell by 13 bps.

Banking problems boosted XAUUSD prices along with the US dollar, but US Treasury bond rates fell.

The gold price benefited from increased concern over the revival of the US banking sector crisis. Which was aided by a drop in US Treasury bond rates. The Gold price’s gain, however, was restrained by the Greenback’s safe-haven demand.

So far in early Wednesday trade. Market mood remains lukewarm following the sell-off in US banking and technology sectors. But US S&P 500 futures are signaling fresh confidence, particularly after better-than-expected earnings from Microsoft and Alphabet after markets closed in New York.

As a result, the US Dollar has paused its rise, encouraging gold bulls to go long. for the third time today. However, if the risk rebound gains traction in the next sessions. US Treasury bond rates would rise as well. Thus limiting the gold price rally.

Markets will also be looking forward to the top-tier Durable Goods Orders data from the United States, which might provide new insights into the status of the US economy ahead of the first-quarter Gross Domestic Product (GDP) preliminary release on Thursday. US Federal Reserve (Fed) expectations, causing the US Dollar to fall further.

Meanwhile, Boeing and Meta earnings reports are slated for publication on Wednesday. Which may have a huge influence on broader market mood, eventually outpacing US Dollar values and Gold price movement.

The headline US Durable Goods Orders for March are expected to rebound to 0.8% from -0.1% in February. While Nondefense Capital Goods Orders ex Aircraft are expected to rise to 0.2% from -0.1% in February. Weak US data is expected to increase dovish sentiment.

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