Gold Price Forecast: Bulls attempting last dance ahead of Jerome Powell?

Gold price licks it wounds after the recent sell-off.
Dollar, Treasury yields steady ahead the key FOMC event.
Fed decision, Jerome Powell’s policy outlook to determine gold’s next direction.

Dhwani Mehta FXStreet

Gold price (XAU/USD) fell for the third day in a row on Tuesday and tested the $1850 psychological support before recovering slightly to near the $1860 region. The US dollar found renewed strength amid rising expectations that US Federal Reserve (Fed) could lay out the foundation for monetary policy normalization on Wednesday, as it plans to keep its policy settings unchanged this month. The greenback strengthened even though the US Retail Sales data disappointed while Producers Price Index (PPI) bettered expectations. The downbeat mood on Wall Street and weaker Treasury yields helped limit the losses in gold price. Despite the drop, gold price remained within Monday’s trading range.

Heading into the FOMC showdown, gold price is attempting a minor pullback, as the US dollar has stalled its advance, turning on the sidelines. Amid pre-Fed caution trading, gold is likely to keep its downside consolidative mode intact, although a brief rebound cannot be ruled amid repositioning. All in all, gold’s next directional move remains in the hands of Fed Chair Jerome Powell and his outlook on the economy, which will influence the American central bank’s next policy action. Patchy US labor market recovery could likely challenge Fed’s tapering expectations.

Gold Price Chart - Technical outlook

Gold: Four-hour chart

On the four-hourly chart, gold price has charted a bear pennant ahead of the FOMC event. It’s a bearish continuation pattern and therefore, risks remain titled to the downside for gold traders.

The Relative Strength Index (RSI) is trading listlessly below the midline while holding just above the oversold territory, suggesting that there is still some room left southwards.

Therefore, a sustained break below the rising trendline support at $1854 will validate the downside breakout, opening floors the 200-Daily Moving Average (DMA) at $1840.

Next on the sellers’ radars will be the May 14 low of $1820.

Alternatively, acceptance above the falling trendline resistance at $1866 will invalidate the bearish formation.

Further, if the FOMC disappoints the hawks, gold price could rebound towards the previous daily support now resistance at $1879.

Ahead of that barrier, the $1870 static resistance and bearish 21-Simple Moving Average (SMA) on the four-hour chart could challenge the bullish commitments.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD turns south toward 0.6900 as USD firms up

AUD/USD sees fresh selling and drops toward 0.6900 in late Asian trading on Monday, as renewed US Dollar strength weighs on the pair amid lingering Middle East and Russia-Ukraine geopolitical tensions. Focus remains on Oil prices, Treasury bond yields, and RBA expectations for fresh trading impetus in the major.

USD/JPY retakes 158.00 amid hawkish BoJ bets, firmer USD

USD/JPY erases losses and retakes 158.00 in the Asian session on Monday, trading within a one-week-old range. Geopolitical uncertainty continues to underpin the US Dollar, despite fading Fed rate hike hopes, supporting the pair's rebound. However, further upside could be capped by hawkish BoJ expectations and looming intervention risks that could support the Japanese Yen.

Gold languishes below $4,200 amid high US yields

Gold trims some losses on Monday, but remains trapped within previous ranges, with upside attempts limited below $4,200 and with two-month lows of $4,110 at a short distance. The recent pullback on the US Dollar Index has provided some support for precious metals although the high US Treasury yields are keeping a floor on US Dollar dips so far.

Pi Network risks a steeper decline as bearish momentum builds

Pi Network extends losses below $0.090 maintaining a steady decline for the fifth consecutive day. The retail demand remains firm, with the notional value of active perpeutals holding above $10 million. The technical outlook for PI remains bearish as bearish momentum mounts.

ISM Services PMI expected to show robust US economy in September

The US ISM Services PMI is expected to improve marginally in September. The US services sector is expected to remain well into expansionary territory. Bets of further Fed tightening appear to have lost traction in the last few days.

The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082. The decline reflects a powerful combination of US Dollar strength, geopolitical uncertainty and renewed concerns about Europe's exposure to higher energy prices.