Gold Price Forecast: Will Fed Chair Jerome Powell rescue XAU/USD buyers?

Gold price is trading below $1,850, at its lowest level since March 10, setting off the final quarter of this year on a negative note. The United States Dollar (USD) is consolidating the previous rebound above the 106.00 level against its major peers, underpinned by a fresh upswing in the US Dollar.

Focus on critical US ISM PMI, Jerome Powell’s speech

Gold price is extending its losing streak into the sixth straight day on Monday, as the US Dollar is looking to find fresh demand amid a cautious mood even though the United States averted a government shutdown. The US Congress late on Saturday voted to pass a stopgap funding bill, with overwhelming Democratic support in a bid to avoid the federal government's fourth partial shutdown in a decade.

China’s business PMIs came in mixed over the weekend, denting the investors’ sentiment amid a Chinese Golden week holiday-induced light trading. The Caixin/S&P Global manufacturing purchasing managers’ index (PMI) fell to 50.6 in September from 51.0 in the previous month, missing forecasts of 51.2. The services index dropped to 50.2 in September vs. 51.8 in August, the lowest reading since December. The official data released by China’s National Bureau of Statistics (NBS) showed on Saturday that the Manufacturing PMI and the Non-Manufacturing PMI outpaced expectations at 50.2 and 51.7 respectively in September.

Further, persistently hawkish US Federal Reserve (Fed) rhetoric combined with a resilient US economy continues to keep the buoyant tone intact around the US Dollar and the US Treasury bond yields, leaving the non-yielding Gold price miring in seven-month troughs.

Attention now turns toward the critical job data from the United States, starting Tuesday with the JOLTs Job Openings, which will throw fresh insights on the country’s labor market, as inflation cools down. The Fed’s most preferred inflation measure, the Core Personal Consumption Expenditures (PCE) - Price Index, softened in August, arriving at 0.1% MoM and 3.9% YoY.

In the meantime, the US ISM Manufacturing PMI and Fed Chair Jerome Powell’s speech due later in the day will be eyed for fresh hints on the economy and the interest rates outlook, which could significantly impact the US Dollar valuations and the Gold price action.

Gold price technical analysis: Daily chart

Having confirmed a symmetrical triangle breakdown and a Death Cross last week, the downside momentum remains intact in Gold price.

With the 14-day Relative Strength Index (RSI) indicator, however, deep into the oversold territory, Gold sellers remain wary over the next leg lower in Gold price.

If Gold sellers succeed in flexing their muscles, immediate support is envisioned at the March 10 low of $1,828, below which a test of the $1,810 static support cannot be ruled out.

Any correction in Gold price from seven-month lows could see a minor hurdle at the $1,850 level, above which the September 28 and 29 highs of $1,880 will emerge as a powerful resistance.

Acceptance above the latter will be needed to take on the $1,900 threshold once again.