• Gold price fades upside momentum at three-month high amid US Dollar rebound.
• United States consumer-centric data propels Fed pivot discussion and keeps XAUUSD bulls hopeful.
• Cautious mood ahead of Biden-Xi meeting teases intraday sellers of gold.

Gold price (XAUUSD) remains pressured around the intraday low near $1,760, snapping two-day uptrend at the highest levels in three months heading into Monday’s European session.

The yellow metal’s latest weakness, or a pullback, could be linked to the comments from US Federal Reserve (Fed) Governor Christopher Waller, as well as anxiety ahead of the Group of 20 Nations (G20) meeting in Bali. Additionally, the return of the bond traders after Friday’s off also provided an opportunity for the XAUUSD bulls to take a breather.

Yields underpin the US Dollar rebound

US 10-year Treasury yields rose six basis points (bps) to 3.89%, printing the first daily gains in four. On the same line was the coupon for two-year US Treasury bonds, up 1.65% intraday near 4.42% at the latest. Given the firmer ties between the US Dollar and the Treasury bond yields, a rebound in the US bond coupons underpin the USD bounce, which in turn weighs on the XAUUSD price.

Fed’s Waller, IMF jostle with China’s Covid news to weigh on the Gold price

Although China’s easing of the coronavirus-led activity restrictions and measures taken to ease the pain of the real estate market by a 16-point plan appeared to have defended the market optimists of late.

However, comments from Fed’s Waller and the International Monetary Fund’s (IMF) gloomy outlook weigh on the sentiment, as well as the gold price. Additionally, teasing the XAUUSD bears are the latest statements from US President Joe Biden and US Treasury Secretary Janet Yellen.

Fed’s Waller said, “Rates will not fall until there is ‘clear, strong evidence’ inflation is falling,” which in turn curtailed the dovish bets on the Fed’s next moves. The policymaker, however, also mentioned that the Fed can begin to consider moving at a slower pace.

Given the recently firmer bets on the Fed’s 0.50% rate hike in December, mainly backed by the last week’s US Consumer Price Index (CPI) and the University of Michigan’s Consumer Confidence Index, the US dollar is likely to remain pressured unless policymakers raise doubts on further easing in the rates.

Eyes on Biden-Xi meeting

While signals relating to the Fed’s next moves and economic fears seemed to have triggered the XAUUSD pullback, the metal’s immediate performance hinges on the meeting between US President Joe Biden and his Chinese counterpart Xi Jinping on the sidelined of the G20.

Ahead of the meeting, Reuters quotes US President Biden as saying that the US communication lines with China would stay open to prevent conflict, with tough talks almost certain in the days ahead. The news also mentioned, “The United States would ‘compete vigorously’ with Beijing while "ensuring competition does not veer into conflict", said Biden, stressing the importance of peace in the Taiwan Strait during an address to the East Asia Summit in Cambodia. He arrived in Bali on Sunday night.” On the same line, US Treasury Secretary Janet Yellen also mentioned, per Reuters, “Biden-Xi meeting aimed at stabilizing u.s. relationship with china, but have been clear about national security concerns.”

Should the Sino-American tussles fail to ease, the gold price could have a further downside to track.

Technical analysis

Gold price remains mildly offered as sellers jostle with the 200-day EMA, around $1,760 by the press time, to retake control.

Although the XAUUSD sellers cheer the overbought RSI (14) to take a risk at the three-month high, a daily closing below the aforementioned key Exponential Moving Average (EMA) appears necessary for the bears.

Even so, a convergence of the 100-day EMA and the previous resistance line from early September, now support around $1,719-18, becomes crucial support to watch during the further downside of the gold price.

It’s worth noting that a five-month-old resistance-turned-support line, near $1,688, appears the last defense of the XAUUSD bulls.

Alternatively, the 61.8% Fibonacci retracement level of gold’s downside from June to September, around $1,778, restricts the metal’s immediate upside.

Gold price: Daily chart

Trend: Bullish