Gold Price Forecast: XAU/USD keeps hovering around $2,150 ahead of Federal Reserve’s decision

XAU/USD Current price: $2,153.80

• Asian central banks delivered dovish messages, underpinning the US Dollar.
• Investors await the Federal Reserve monetary policy announcement with a cautious stance.
• XAU/USD trades range bound around $2,150, with the upside limited in the near term.

Gold trimmed Monday’s gains amid resurgent US Dollar demand, with XAU/USD trading around $2,154 in the mid-American session. The Greenback found strength following central banks’ mostly dovish announcements, as the  Reserve Bank of Australia (RBA) and the Bank of Japan (BoJ) unveiled their monetary policy decisions.  

The RBA left rates unchanged and maintained its cautious outlook on economic progress and easing inflation. The BoJ, on the other hand, delivered as expected, lifting rates for the first time in 17 years and dropping the Yield Curve Control (YCC) program. However, the BoJ still doubted it could maintain healthy inflation and pledged to continue buying bonds.

The US Dollar pared gains ahead of Wall Street’s opening and retreated modestly from its intraday highs, retaining the green against most major rivals. Treasury yields, which shed some ground after reaching fresh March highs on Monday, also favored the decline.

Volatility dropped in the US session as investors gear up for the Federal Reserve (Fed) announcement. The United States (US) central bank will unveil its decision on Wednesday alongside fresh economic projections. Financial markets head into the event with high levels of caution, as recent data suggest US policymakers may hold rates higher for longer.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows the pair held above the 23.6% Fibonacci retracement of the bullish run between $1,984.03 and $2,195.2 at $2,145.17, the immediate support level. At the same time, the pair keeps developing far above all its moving averages, with the 20 Simple Moving Average (SMA) heading firmly north above the longer ones while below the current level. Finally, technical indicators keep correcting overbought conditions but remain far above their midlines.

In the near term, and according to the 4-hour chart, the bullish case seems limited, currently at around $2,158.40, although a steeper decline remains unclear. XAU/USD trades below a mildly bearish 20 SMA, while the longer ones extended their advances below the current level.  At the same time, technical indicators remain within negative levels, lacking clear directional strength.

Support levels: 2,145.10 2,134.70 2,119.94

Resistance levels: 2,163.40 2,176.50 2,195.20