Gold Price Forecast: XAU/USD flirts with weekly tops around $1,780, focus remains on FOMC

  • Gold posts fresh gains for the fourth straight session on Wednesday.
  • Higher US Treasury yields underpin the demand for the US dollar.
  • FOMC volatility, improved risk sentiment exert pressure on the higher side.

Update: Gold traded with a mild positive bias through the early European session and was last seen hovering near around the $1,778 region, just below weekly tops touched in the previous day. A subdued US dollar price action seemed to be the only factor that extended some support to the dollar-denominated commodity. That said, the risk-on impulse in the markets acted as a headwind for traditional safe-haven assets and failed to assist the XAU/USD to make it through the 200-hour SMA barrier. The global risk sentiment got a strong lift after struggling property giant China Evergrande said it would pay some bond interest due on Thursday.

Apart from this, expectations for an imminent Fed taper announcement further collaborated to keep a lid on any meaningful gains for the non-yielding yellow metal. Hence, the market focus will remain on the outcome of a two-day FOMC policy meeting on Wednesday. Investors will look for clues about the likely timing of when the Fed would being rolling back its massive pandemic-era stimulus. This, along with the latest economic projections and the so-called dot plot, will play a key role in influencing the near-term USD price dynamics and provide a fresh directional impetus to gold. This makes it prudent to wait for some follow-through buying before confirming that the recent pullback from the $1,832-34 region has run its course and placing fresh bullish bets.

Previous update: Gold prices print minute gains on Wednesday and lack conviction to break $1,780 convincingly due to a sudden uptick in the greenback following a show from the Bank of Japan (BOJ).

The US Dollar Index, which tracks the performance of the greenback against the basket of six major currencies, remains strong above 92.20, while US benchmark 10-year Treasury yields record another session of gains ahead of the crucial FOMC meeting.

The Bank of Japan (BOJ) left its key short-term interest rate unchanged at -0.1% and the bond yield target at around 0% during its September meeting. The economic view pointed out the bleak employment and income situation due to the COVID-19 pandemic. 

Now Investors turn their attention to the Fed's two-day meeting, which is due to conclude on Wednesday as they focus on new signals on the tapering timeline. The US central bank is also likely to provide an outlook on interest rate hikes.

Gold is generally considered a hedge against inflation and currency volatility. A Hawkish move by the Federal Reserve would diminish gold’s appeal. If the Fed increases rate hike in its monetary policy meeting that would also raise the opportunity cost of holding the non-interest-bearing asset.

 Technical levels

Gold prices have rebounded from the 61.8% Fibonacci retracement, which is extending from the low made on September 9 at $1,687.78 to $1,754. 

XAU/USD daily chart

The Moving Average Convergence Divergence (MACD) holds below the midline  with a neutral stance . Any downtick in the MACD indicator would confirm the downside momentum and the prices would approach toward the $1,750 horizontal support level.

A daily close below Monday low could trigger a fresh round of selling in the precious metal. XAU/USD bears would target the low of August 11 at $1,724.

Alternatively, the formation of a Doji candlestick suggests indecisiveness among traders at the upper level. If prices reverse direction then the first upside target would appear at  the 38.2% Fibonacci retracement level at $1,785.

XAU/USD additional levels


Today last price 1776.5
Today Daily Change 2.00
Today Daily Change % 0.11
Today daily open 1774.5
Daily SMA20 1795.23
Daily SMA50 1794.67
Daily SMA100 1815.61
Daily SMA200 1807.23
Previous Daily High 1781.79
Previous Daily Low 1758.01
Previous Weekly High 1808.67
Previous Weekly Low 1745.39
Previous Monthly High 1831.81
Previous Monthly Low 1687.78
Daily Fibonacci 38.2% 1772.71
Daily Fibonacci 61.8% 1767.09
Daily Pivot Point S1 1761.08
Daily Pivot Point S2 1747.65
Daily Pivot Point S3 1737.3
Daily Pivot Point R1 1784.86
Daily Pivot Point R2 1795.21
Daily Pivot Point R3 1808.64



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD stays afloat above 1.1600 as inflation data meet expectations

EUR/USD came under modest bearish pressure in the early European session and continues to have a difficult time regaining its traction. After the data from the euro area revealed that annual CPI stayed unchanged at 3.4% in September, the pair stays relatively calm above 1.1600.


GBP/USD drops below 1.3800 as UK CPIs disappoint

GBP/USD eases below 1.3800, as an unexpected decline in the UK inflation douses the BOE rate hike expectations. Covid resurgence in the UK also undermines the pound. The pair could find support from a broadly subdued US dollar and fresh Brexit optimism. 


Gold: $1791 appears a tough nut to crack for XAU/USD bulls

Gold price is holding the higher ground, extending the previous advance amid a pullback in the US 10-year Treasury yields from five-month highs of 1.672%.

Gold News

Crypto markets prepare for final pullback before next leg up

Bitcoin price is due for a retracement as MRI flashes a sell signal on the daily chart. Ethereum price continues to consolidate under the $3,938 resistance level. Ripple price slides below the $1.09 support level as the crypto markets prepare for a minor correction.

Read more

Tesla: Why it is time to sell TSLA stock

Tesla breaks higher again on Monday as we had called. TSLA to release earnings after the close on Wednesday. Is it time to sell Tesla stock now before earnings?

Read more