Gold Price Forecast: XAU/USD eyes triangle breakdown and Fedspeak

Gold price is extending the previous decline toward $1,970 in early Tuesday, as the United States Dollar (USD) remains on a gradual recovery path amid a negative shift in risk sentiment. Traders await the return of the public appearances from the US Federal Reserve (Fed) policymakers for a fresh trading impetus.

Attention turns to Fedpseak for the next Gold price direction

The risk rally witnessed early Monday petered out, as global growth worries and uncertainty over the Fed’s policy outlook returned and lifted the safe-haven demand for the US Dollar. The rebound in the US Treasury bond yields, following the previous week’s sharp correction, also aided the US Dollar recovery at the expense of the non-yielding Gold price.

Gold price dropped nearly $15 on Monday, kicking off a relatively data-light week on the wrong footing. The pause in the US bond market’s rally also dented risk appetite, as investors fretted about surging borrowing costs, with the benchmark 10-year US Treasury bond yields having briefly topped 5.0% last week.

In Tuesday’s trading so far, Gold price seems vulnerable in four-day troughs near $1,970. However, the renewed selling in the US Treasury bond yields could cap further decline in Gold price. Markets are looking forward for the Fed officials to return to the rostrum again, with their outlook on future policy likely to be closely scrutinized after Fed Chair Jerome Powell last week was less hawkish than expected. Powell’s comments squashed hopes of a December interest rate hike.

On Monday, Fed Governor Lisa Cook said that she hopes the central bank's current target interest rate is adequate to return inflation to the Fed's 2% target.

Tuesday’s will see Fed Governor Christopher Waller and New York Fed President John Williams speaking and any hints on the path forward on interest rates will have a significant impact on the US Dollar, as well as, Gold price valuations. The bond market action will be also in focus.

The main event risk this week is expected to be Fed Chair Jerome Powell’s speech on Wednesday and Thursday, marking his first appearance after the November Fed meeting.

Gold price technical analysis: Daily chart

Gold price defended the rising trendline support at $1,978 on Monday. But sellers have flexed their muscles, teasing an ascending triangle breakdown on the daily chart early Tuesday.

If Gold price manages to yield a daily closing below the rising trendline support, now at $1,981, a downside break from the ascending triangle will be confirmed.

Immediate cushion is seen at a November 1 low of $1,970. A failure to resist above the latter will target a bullish 21-day Simple Moving Average (SMA) at $1,966.

The next relevant support is seen at $1,963 en route to the $1,950 psychological level.

With the 14-day Relative Strength Index (RSI) indicator still holding above the 50 level, the downside momentum in Gold price appears short-lived.

Gold buyers need a sustained move above the $1,981 barrier should they attempt a rebound. Further up, Monday’s high of $1,993 will be challenged.

Acceptance above the $2,000 threshold is critical to initiating a meaningful uptrend toward the multi-month high of $2,009, where the horizontal trendline resistance aligns.