Gold Price Forecast: XAU/USD soars to $1977 post-Fed Powell’s dovish comments, tumbled the USD

• XAU/USD trades at $1971.15, marking a 1.24% gain.
• Fed Chair Jerome Powell's comments at the Economic Club of New York led to expectations of no further rate hikes by the Fed.
• Powell states that policy is restrictive and emphasizes the need for careful policy setting.

Gold price (XAU/USD) extended its gains to three straight days and approached the next cycle high of $1977 a troy ounce after remarks from the US Federal Reserve Chair Jerome Powell weighed on the Greenback, as investors expect no further rate increases by the Fed. The XAU/USD is trading at $1971.15, gaining 1.24%.

Gold price (XAU/USD) extends gains for three consecutive days, approaching the next cycle high of $1982.15 per troy ounce

During Powell’s appearance at the Economic Club of New York, Wall Street seesawed, but at the time of writing, trade with losses. Fed Chair Jerome Powell commented that policy is restrictive and that the Fed would proceed “carefully” in setting its policy. He emphasized that above-trend growth and a tight labor market “could warrant further tightening of monetary policy.”

Consequently, US Treasury bond yields, particularly the 10-year benchmark note rate, wavered at around a ten-basis point spread, though it had settled at around 4.973%, but failed to underpin the Greenback, which prints losses of 0.47%, as shown by the US Dollar Index (DXY), at 106.05.

On the data side, the US calendar featured the Philadelphia Manufacturing Index for September, portraying a gloomy economic outlook for the region. At the same time, the US Bureau of Labor Statistics (BLS) revealed that last week’s Initial Jobless Claims slowed to 198K, below forecasts and previous figures, at 212K and 211K, respectively.

Ahead of the week, the docker would feature Fed speakers before entering their blackout period as they brace for the upcoming monetary policy meeting.

XAU/USD Price Analysis: Technical outlook

After clearing the 200-day moving average (DMA) at $1930.70, Gold could test the latest cycle high of $1987.42, before rallying to $2000. Once those two areas are cleared, up next would be the all-time high (ATH) at $2081.82. On the flip side, if sellers moved in and dragged prices below the psychological $1950, that would open the door to test key support levels like the 200-DMA at 1930.68, the 100-DMA at 1922.13, and the 50-DMA at $1902.54.