Gold Price Forecast: XAU/USD dips to 7-week low beneath $1,900 after FOMC minutes


  • Fed officials unanimously aim to achieve the 2% inflation target, but divisions emerge on the path forward.
  • XAU/USD reacts with a sharp drop, testing the S1 daily pivot point, while US Treasury yields and the greenback see upward movement.
  • Key levels to watch include the $1,900 psychological mark and the 50-hour Moving Average at $1,904.34

Gold price treads water after the latest Federal Reserve’s (Fed) meeting minutes showed board officials were split between raising rates or keeping them unchanged at the July meeting. After the data release, XAU/USD trades volatile, hit a fresh 7-week low at $1,895.48 and is seesawing at around the $1,900-$1,890 area.

XAU/USD seesaws around the $1,900 mark as Federal Reserve minutes reveal split opinions on monetary policy

The minutes revealed a unanimous determination among all Federal Reserve officials to persist in their objective of lowering inflation to the targeted 2%, while most participants assessed that upside risks on inflation would require additional tightening.

However, a division within the Fed board became evident regarding monetary policy, as a “few” members advocated for maintaining the existing interest rates. Among them, Atlanta’s Fed President Raphael Bostic consistently voiced his stance in favor of unchanged rates.

The minutes showed that while the economy has displayed resilience, concerns persist about potential downsides to economic activity and possible risks of an increase in the unemployment rate.

Federal Reserve officials agreed that forthcoming rate decisions would be based on a comprehensive assessment of incoming data while adopting a cautious approach in the upcoming months.

XAU/USD reaction on hourly chart

As the minutes were released, the XAU/USD dropped sharply towards the S1 daily pivot point at $1,894.89 and bounced off that level. At the same time, US Treasury bond yields climbed with the 10-year benchmark note edging toward 4.246%, while the greenback hit a daily high of 103.457 before trimming some of its gains.

If XAU/USD achieves a daily close below $1,900, that could expose March’s 13 daily low of $1,867.17 as the next support, ahead of dropping towards the latest swing low of $1,809.48. Contrarily, if buyers reclaim $1,900, that could expose the 50-hour Moving Average (HMA) at $1,904.34, slightly above the daily pivot point.

XAU/USD Hourly chart

XAU/USD Technical Levels

XAU/USD

Overview
Today last price 1898.12
Today Daily Change -3.72
Today Daily Change % -0.20
Today daily open 1901.84
 
Trends
Daily SMA20 1941.87
Daily SMA50 1939.06
Daily SMA100 1965.14
Daily SMA200 1904.22
 
Levels
Previous Daily High 1911.77
Previous Daily Low 1896.49
Previous Weekly High 1946.82
Previous Weekly Low 1910.92
Previous Monthly High 1987.54
Previous Monthly Low 1902.77
Daily Fibonacci 38.2% 1902.33
Daily Fibonacci 61.8% 1905.93
Daily Pivot Point S1 1894.96
Daily Pivot Point S2 1888.09
Daily Pivot Point S3 1879.68
Daily Pivot Point R1 1910.24
Daily Pivot Point R2 1918.65
Daily Pivot Point R3 1925.52

 

 

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