Gold Price Forecast: XAU/USD seeks cushion above $1,780 as Fed policy outlook muddles US Dollar
|- Gold price is seeking a cushion near $1,780.00 as US Dollar dwindled on the Fed policy outlook.
- The cautious market mood amid uncertainty over Fed’s policy outlook is impacting risky assets.
- A policy change from the FOMC in CY2023 would set the stage for a prolonged decline in the Greenback.
Gold price (XAU/USD) is looking to build a cushion around the immediate support of $1,782.00 in the Asian session. The precious metal was corrected after failing to surpass the critical hurdle of $1,790.00. Gold price is displaying mixed responses as uncertainty over the policy outlook by the Federal Reserve (Fed) has turned the market mood cautious.
The US Dollar index (DXY) is hovering around 105.30 in the Tokyo session. The street is having mixed views on Fed’s policy outlook. Upbeat Nonfarm Payrolls (NFP) and robust demand in the service sector have shown strength in the United States economy while expectations for higher interest rate guidance are triggering recession fears.
Meanwhile, S&P500 futures have carry-forwarded their subdued performance, portraying a precautionary mood until any potential trigger could provide decisive guidance. The Gold price could deliver a rally in the first quarter of CY2023 as economists at the National Bank of Canada are of the view that a policy change from the FOMC would set the stage for a more prolonged decline in the Greenback.
Gold technical analysis
Gold price is seeking a cushion around the horizontal support placed from December 2 low at $1,778.5 on an hourly scale. The 20-period Exponential Moving Average (EMA) is acting as a major cushion for the asset.
Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range. It would be early calling it a reversal, however, the Gold price has surrendered upside momentum.
Gold hourly 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.