Gold Price Forecast: XAU/USD faces hurdles near $1,960 as Fed Powell anticipates one more rate hike

Gold price (XAU/USD) has sensed barricades near $1,960.00 in the Asian session. The precious metal has shifted its auction below $1,960.00 led by easing United States banking jitters and growing chances of one more interest rate hike by the Federal Reserve (Fed).

S&P500 futures have witnessed minimal losses in the Tokyo session after a stalwart buying on Wednesday, indicating that the overall market mood is cheerful but caution has emerged after commentary from Fed chair Jerome Powell.

Republican Representative Kevin Hern reported through Bloomberg that Fed Powell still sees one more rate hike when asked in a private meeting with US lawmakers about how much further the central bank will raise interest rates this year.

The US Dollar Index (DXY) has shown a recovery and is hovering near Wednesday’s high around 102.77. The USD Index is looking to extend its upside move further on hopes of rising hawkish Fed bets.

Meanwhile, the display of meaningful efforts by US authorities to infuse confidence among investors that the banking system is ‘sound and resilient’ has also trimmed appeal for the Gold as a safe-haven. US lawmakers and Fed Powell have discussed the need of raising insurance limits after the collapse of Silicon Valley Bank (SVB) and Signature Bank. Currently, the Federal Deposit Insurance Corporation (FDIC) currently insures up to $250,000 per depositor.

Gold technical analysis

Gold price is demonstrating a sheer contraction in volatility amid an absence of potential triggers. Broadly, the asset is auctioning in a Symmetrical Triangle chart pattern on an hourly scale. The upward-sloping trendline of the chart pattern is plotted from March 22 low at $1,934.34 while the downward-sloping trendline is placed from March 20 high at $2,009.88.

Inside the broader triangle, a small xSymmetrical Triangle is also emerging, which is indicating a build-up of strength for a decisive move.

The Gold price has dropped below the 20-period Exponential Moving Average (EMA), which is at $1,963.66, indicating a short-term bearish trend.

Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00. The absence of divergence and oversold signals cement more downside.

Gold hourly chart