Gold bulls stay cautious as US bond yields and USD hold steady ahead of Warsh's speech

Gold (XAU/USD) bounced back from a slight decline in the Asian session on Friday, though it remains hesitant to make a significant move, despite a slight strengthening of the US Dollar (USD). Inflationary pressures in the United States have recently escalated, prompting market participants to expect a potential rate hike by the Federal Reserve (Fed) soon.

This surge in US inflation, coupled with a stabilization in bond yields following a steep drop earlier in the week, suggests that the safe-haven status of the USD is being reinforced. The Fed Chair Kevin Warsh is set to provide further insights into the Fed's stance during his upcoming speech at the International Monetary Fund (IMF) and World Bank Group meetings in Bangkok.

Traders are closely watching Warsh's remarks for clues about the Fed's future policy direction. In the meantime, geopolitical tensions in the Middle East, including recent missile strikes by Houthi forces targeting Yemeni and Saudi government facilities, have added a layer of uncertainty to the market, potentially sustaining the strength of the USD and impeding gold's upward trajectory.

Currently, the XAU/USD pair is finding it challenging to break above the 100-period Simple Moving Average (SMA) and is also below the 61.8% Fibonacci retracement level of the July-August rally. While the Moving Average Convergence Divergence (MACD) indicator is positive and on the rise, indicating growing upward momentum, the Relative Strength Index (RSI) stands at 56, suggesting mildly bullish conditions without crossing into overbought territory.

Analysts recommend waiting for a clear breakthrough above the $4,200 level and the 61.8% Fibonacci retracement at $4,238 before committing to further gains towards the 50.0% retracement at $4,325 and the 38.2% level at $4,412. On the downside, the immediate support lies at the 78.6% Fibonacci retracement at $4,115, followed by the $4,075-$4,065 horizontal support zone.

Should the price breach below the latter, it could potentially test the Fibonacci structural floor at $3,957.