Gold price started the second quarter on a strong bullish note. The precious metal surged to a fresh 12-month high of $2030 last week. The strong bullish momentum was driven by the expectations that the US Federal Reserve will slow down its tightening campaign in the coming months.

However, the metal trims a part of its monthly gains and retreats to below the $1985 mark on Monday. The upbeat US monthly employment assists the US Dollar to stage a modest recovery from over a 2-month low touched last week, which, in turn, acts as a headwind for the precious metals. The king dollar regained momentum after the NFP report renewed bets the Fed could move on with another 25bps hike next month.

Moving ahead, this week the safe-haven metal could continue to strengthen due to the rising tensions between Taiwan and China, but the long-term direction of the gold price will depend on the US inflation report which will release on Wednesday. The March US inflation data will likely have a significant effect on gold and other precious metals because the CPI report will hold more clues on the pace and size of future FED rate hikes.

On the other hand, gold traders should also closely watch the release of the International Monetary Fund's global economic growth forecast. IMF will release its updated global economic growth forecast on Tuesday amid concerns over high inflation and financial stability risks.

Will gold price manage to recover from the recent pullback?

There was a decent rise in gold prices in the last couple of weeks. The metal slowly and steadily climbed higher and broke a major resistance of $2000. If the bulls remain in action, they could soon make another attempt to push the price near the main $2075 resistance area. For the long term, the bulls need a decisive push above the all-time high of $2075, and that won't be easy unless the dollar continues to cool back. The bullish breakout of $2075 will likely push the gold into a new trading zone, which may offer further buying opportunities until $2100 then $2130.

In the short term, $1980 is the immediate support level, followed by $1974. If the metal breaks below $1974, the slump will quickly extend toward the $1965/60 mark. On the flip side, if the precious metal regains upside momentum and breaks above $2000 is likely to push the metal into a new trading zone, which may offer further buying opportunities until $2020/35.

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