Gold Price Forecast: XAU/USD holds in bullish territory, bulls await the RBA to potentially weigh th

• Gold prices grind higher after a positive start to the key week.

• S&P 500 Futures fail to extend Wall Street gains, yields struggle for clear direction amid unimpressive Fedspeak, Russia-Ukraine updates.

• DXY licks its wounds after declining the most in a month as traders shift attention from Fed.

• Gold Price Forecast: Corrective advance capped by selling interest aligned at around $1,800

Trading in Asian hours are expected to remain subdued with several markets on holiday for the Lunar New Year, however, the Reserve Bank of Australia could upset the peace and quiet. Expectations are building that Governor Philip Lowe will capitulate on his prior conviction that an interest rate rise this year was unlikely.

This could rock the greenback and subsequently support gold prices higher, The dollar index (DXY), which measures the greenback against six rivals, ticked 0.05% higher to 96.715, barely making a dent in Monday's 0.59% drop. It was at an almost 19-month high of 97.441 at the end of last week, as investors tried to second guess the Federal Reserve's moves for the year ahead, partially pricing in a 50 basis point rate hike in March.

End of update

Gold (XAU/USD) buyers flirt with the $1,800 threshold, keeping the previous days bounce off a seven-week low during a quiet Asian session on Tuesday.

In doing so, the precious metal ignores downbeat US stock futures, as well as sluggish Treasury yields, after mixed updates from the Fed and positive news over the Russia-Ukraine tussles seem to have recalled the buyers.

Having witnessed the Feds hawkish halt the last week, various Fed policymakers conveyed their dissatisfaction with the higher inflation and favored rate hikes in March. However, a lack of clarity on the pace of rate lift seems to have weighed on the US Dollar Index (DXY), which in turn favored gold, the previous day. Among the key Fed speakers were Atlanta Fed President Raphael Bostic and Kansas City Fed President Esther George, not to forget Federal Reserve Bank of San Francisco President Mary Daly.

Elsewhere, the Washington Post (WaPo) conveyed the news of Russian response to the US proposal over Ukraine, citing an anonymous Senior Diplomat. “The Russian government has delivered a written response to a U.S. proposal aimed at de-escalating the Ukraine crisis.” Its worth noting that UK PM Boris Johnson is also scheduled to visit Ukraine on Tuesday whereas US Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov will also hold meetings today.

In addition to the mixed Fed updates and receding pressure on the Russia-Ukraine issue, a light calendar and the market‘s attention off the Fed’s hawkish communication also favored the Wall Street benchmarks to post an upbeat start to the week. The same challenged the US 10-year Treasury yields while the US Dollar Index (DXY) dropped the most in a month, which in turn backed gold buyers.

Looking forward, gold traders will keep their eyes on the US ISM Manufacturing PMI for January, expected 57.5 versus 58.7 prior, for immediate direction. However, major attention will be given to the Fedspeak and developments concerning Russia.