Gold Price Forecast: XAU/USD consolidates its gains, Fed rate decision looms


  • Gold price remains flat near 1,932 ahead of major central bank events.
  • The Federal Reserve (Fed) is widely expected to hold the interest rates in the 5.25% to 5.5% range.
  • Fed, Bank of England (BoE), Bank of Japan BoJ monetary policy meeting will be closely watched by traders.

Gold price (XAU/USD) consolidates its recent gains above the $1,900 mark during the Asian session on Tuesday. Traders prefer to wait on the sidelines ahead of the major central banks' monetary policy meeting. The Federal Reserve (Fed), the Bank of England (BoE), and the Bank of Japan (BoJ) will announce the interest rate decision later this week and these events could trigger the volatility in the market. At the press time, gold price is losing 0.06% on the day to trade at $1,932.

The Federal Reserve (Fed) is scheduled to announce the two-day monetary policy meeting on Wednesday and is widely expected to hold the interest rates in the 5.25% to 5.5% range. According to the CME Fedwatch Tool, the odds of keeping rates unchanged at 99%. However, markets remain cautious of the Fed's outlook, owing to a recent uptick in inflation data and the resiliency of the US economy, which could pave the way to additional rate hikes.

Traders will closely monitor the press conference of Federal Reserve Chairman Jerome Powell, which might provide clues about the future path of interest rates. It’s worth noting that rising interest rates raise the opportunity cost of investing in non-yielding assets, implying a negative outlook for precious metals.

Meanwhile, a gauge of the value of the US dollar versus six major currencies faces some follow-through selling but remains above 105.10. US Treasury yields fell on Tuesday, with the 10-year bond falling to 4.30% by press time. The Greenback's strength is being undermined by declining yields.

Looking ahead, gold traders will closely watch the Fed interest rate decision on Wednesday at 18:00 GMT. The attention will shift to the press conference by Fed Chairman Jerome Powell at 18:30 GMT for some hints about the ‘dot plot’ and inflation expectations. Later this week, the BoE will announce its benchmark rates on Thursday, and the BoJ monetary policy meeting is scheduled for Friday. These figures could give a clear direction to gold prices.

 

XAU/USD

Overview
Today last price 1932.28
Today Daily Change -1.54
Today Daily Change % -0.08
Today daily open 1933.82
 
Trends
Daily SMA20 1922.88
Daily SMA50 1932
Daily SMA100 1946.42
Daily SMA200 1922.91
 
Levels
Previous Daily High 1934.32
Previous Daily Low 1922.62
Previous Weekly High 1930.77
Previous Weekly Low 1901.07
Previous Monthly High 1966.08
Previous Monthly Low 1884.85
Daily Fibonacci 38.2% 1929.85
Daily Fibonacci 61.8% 1927.09
Daily Pivot Point S1 1926.19
Daily Pivot Point S2 1918.55
Daily Pivot Point S3 1914.49
Daily Pivot Point R1 1937.89
Daily Pivot Point R2 1941.95
Daily Pivot Point R3 1949.59

 

 

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