Gold Price Forecast: XAU/USD faces barricades above $1,930 amid hawkish Fed chatters
|- Gold price is struggling to sustain above the immediate resistance of $1.930.00.
- Hawkish commentary from Fed policymakers is strengthening the US Treasury yields.
- According to a Reuters survey, the Fed will pause the policy tightening program after two 25 bps rate hikes.
Gold price (XAU/USD) is witnessing selling pressure in sustaining above the critical resistance of $1,930.00 in the Asian session. The precious metal is struggling to extend gains as hawkish commentaries from various Federal Reserve (Fed) policymakers.
S&P500 futures are trying hard to hold early Asian gains, however, it is difficult to consider it a recovery in the risk-appetite theme. The demand for US government bonds is easing as the Fed is expected to continue higher interest rates for a decent period. The 10-year US Treasury yields have scaled to near 3.42%. Meanwhile, the US Dollar Index (DXY) is displaying a lackluster performance, oscillating in a narrow range above 101.60.
No doubt, the signs of declining inflation through the lens of economic slowdown, decelerating Producer Price Index (PPI) numbers, and weaker retail demand are compelling, but the inflation rate is still extremely far from the 2% inflation target. Therefore, a continuation of the interest rates announcement by the Fed cannot be ruled out.
From the outcome of a survey, Reuters claims that Fed chair Jerome Powell will pause the policy tightening program for the rest of CY2023 after hiking interest rates by 25 basis points (bps) in the next two monetary policy meetings.
Gold technical analysis
Gold price is set for a fresh upside as the asset has delivered a breakout of the Symmetrical Triangle chart pattern on an hourly scale. The breakout of the volatility contraction chart pattern seems solid as the size of ticks after the breakout was wider than average.
Upward-sloping 20-and 50-period Exponential Moving Averages (EMAs) at $1,923.91 and $1,917.54 respectively, add to the upside filters.
The Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the upside momentum is active.
Gold hourly chart
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