Gold Price Forecast: XAU/USD hovers around $2,360 after Powell’s words

XAU/USD Current price: $2,360.03

• Federal Reserve Chairman Jerome Powell testified before the Senate Banking Committee.
• Chairman Powell will repeat its testimony on Wednesday before a different commission.
• XAU/USD under modest selling pressure but holding above $2,350.

Gold remained weak throughout the first half of Tuesday, albeit holding on to familiar levels as financial markets traded with an optimistic yet neutral stance. XAU/USD fell to $2,349.31 yet quickly trimmed losses and bounced towards the current price zone just above $2,360 as investors assessed words from Federal Reserve (Fed) Chairman Jerome Powell.

Testifying before the Senate Banking Committee on monetary policy, Powell offered some hawkish headlines that helped the US Dollar. Among other things, he said that restrictive policies are helping put downward pressure on inflation, but adding that inflation remains above the 2% goal. Furthermore, he said that policymakers are not confident enough that elevated inflation will keep receding and that they need more confidence to abandon the tight monetary policy stance. Finally, he explained that decisions would be made meeting by meeting.

Powell will repeat its testimony on Wednesday before a different commission and may add some interesting headlines, although the most relevant comments have already been made.

XAU/USD short-term technical outlook  

From a technical point of view, the daily chart for XAU/USD shows it trades at around its daily opening, with the risk still skewed to the upside. The pair keeps trading above all its moving averages, with the 20 Simple Moving Average (SMA) flat, providing dynamic support at around $2,335. The 100 and 200 SMAs maintain their upward slopes far below it, while technical indicators turned flat right above their midlines.

In the near term, and according to the 4-hour chart, on the contrary, the risk skews to the downside. Sellers are aligned at around a flat 20 SMA, while technical indicators are crossing their midlines into negative territory without enough strength to confirm an upcoming slide. Finally, the 100 and 200 SMAs converge at around the $2,335 price zone, reinforcing its relevance as a support area.

Support levels: 2,349.30 2,335.00 2,318.40

Resistance levels: 2,368.60, 2,387.60 2,400.00