Gold Price Forecast: XAU/USD rebounds to near $1,950 as investors divide about Fed’s policy
|- Gold price has extended its recovery to near $1,950.00 as the USD Index has dropped sharply.
- Investors have started shrugging off fears associated with expectations of more interest rate hikes by the Fed.
- Gold price is hovering near the upward-sloping trendline of the Ascending Triangle chart pattern.
Gold price (XAU/USD) attempted a recovery after dropping to near $1,940.00. The precious metal has extended its rebound move to near $1,950.00 as the US Dollar Index (DXY) has dropped sharply. Broader choppiness in the USD Index has kept investors on their toes. An absence of potential triggers this week has bounded the USD Index in a limited territory.
S&P500 futures have recovered their entire losses and have turned positive, showing signs of recovery in the risk appetite of the market participants. It seems that investors have started shrugging off fears associated with expectations of more interest rate hikes by the Federal Reserve (Fed).
The USD Index has found an intermediate support around 103.80, however, the situation for the USD index seems vulnerable as the market sentiment has turned cheerful. In spite of the short-term correction, strength in the USD Index would stay as the Fed is expected to remain hawkish further.
Meanwhile, a survey from Reuters showed that “It would take rate cuts from the Federal Reserve to weaken the currency substantially.” Also, Fed would pause in June for the first time in more than a year and keep its key interest rate at 5.00%-5.25% then and for the rest of the year.
Gold technical analysis
Gold price is hovering near the upward-sloping trendline of the Ascending Triangle chart pattern on a two-hour scale plotted from May 30 low at $1,932.12. The horizontal resistance of the aforementioned pattern is placed from May 19 high at $1,983.29. The precious metal is trading below the 50-period Exponential Moving Average (EMA) at $1,955.38, which indicates that the short-term trend is bearish.
Meanwhile, the Relative Strength Index (RSI) (14) is struggling in holding itself above 40.00.
Gold two-hour chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.