Gold Price Forecast: XAU/USD aims lower ahead of FOMC Minutes

XAU/USD Current price: $2,023.03

• Market players await FOMC Meeting Minutes for fresh directional clues.
• US indexes trade in the red ahead of Federal Reserve’s news.
• XAU/USD pressures recent lows amid resurgent US Dollar demand.

The US Dollar gathered intraday momentum with Wall Street’s opening and ahead of the release of the Federal Open Market Committee (FOMC) Minutes. The Greenback trades mixed against its major rivals, marginally benefiting from a dismal mood. Asian and European equities struggled to post gains earlier in the day, while US indexes maintain the negative tone seen on Tuesday and trade in the red for a second consecutive day, reflecting the absence of risk appetite.

The FOMC Minutes should provide additional clues on the Federal Reserve (Fed) decision to keep rates unchanged in the first meeting of 2024, while Chairman Jerome Powell stated that a March rate cut was quite unlikely. Ever since the meeting, the country released employment and inflation-related data that support the Fed’s wait-and-see case. As a result, speculative interest moved its rate-cut expectations to June, dropping bets for a May movement. The document, then, seems to have become old news and has few chances of affecting currencies.

XAU/USD short-term technical outlook

The daily chart for the XAU/USD pair shows bulls are losing conviction. The pair is stuck around a flat 20 Simple Moving Average (SMA) while the longer moving averages maintain their bullish slopes far below the current level. Technical indicators, however, remain below their midlines, with the Momentum indicator turning marginally lower within negative levels and the Relative Strength Index (RSI) indicator holding directionless at around 50. The risk skews to the downside, although additional confirmation is needed.

Exterminating the XAU/USD 4-hour chart, technical readings suggest easing optimism. Technical indicators remain within positive levels but offer bearish slopes, reflecting the ongoing selling. At the same time, the pair is breaking below converging and directionless 100 and 200 SMAs, while the 20 SMA keeps heading north below the current level, providing dynamic support at around $2,020.94.

Support levels: 2,020.95 2,011.40 1,995.35  

Resistance levels: 2,032.50 2,045.20 2,064.90