Gold Price Forecast: XAUUSD subdued around $1715, post US data, ahead of the FOMC

Gold price snaps two days of losses and barely gains as traders brace for the US Federal Reserve monetary policy decision amidst a mildly risk-on mood, spurred by US companies earnings beating estimations, though investors remain cautious. At the time of writing, the XAUUSD is trading at $1719 a troy ounce.

Gold is almost flat on cautious risk-on impulse, ahead of the Fed

US equities are rising due to company earnings. Upbeat US economic data, with Durable Goods Orders surprisingly gaining more than expected, alongside the Trade Balance deficit narrowing for the third consecutive month in June, alleviate some concerns about a negative print in the Q2 Advance GDP report on Thursday.

Digging into the data, orders rose by 1.9% MoM, higher than the 0.5% contraction expected by analysts and double the previous month’s figure, while inventories maintained their pace.

The US docket unveiled additional housing data on Wednesday. Pending Home Sales plummeted, contracting 20%, more than May’s 13.8% plunge, as a consequence of the Federal Reserve’s path. Raising rates was immediately felt in the housing market. Although the Fed’s job is to tame inflation, it indirectly is cooling the housing market.

Elsewhere, the US Dollar Index, a gauge of the buck’s value against its peers, rises 0.14% and sits at 107.30, while the US 10-year Treasury note coupon slumps one and a half bps and yields 2.772%. Even though lower yields would imply high gold prices, the yellow metal remains downward pressured by the steeper appreciation of the US dollar.

What to watch

The US economic docket will feature the Federal Reserve Open Market Committee (FOMC) decision around 18:00 GMT. The US Federal Reserve is expected to hike rates by 75 bps to the Federal funds rate (FFR) to 2.50%. The CME FedWatch tool illustrates that Fed odds of hiking 100 bps lie at 23.7%, while a 75 bps increase is fully priced in.

Gold Price Forecast (XAUUSD) Key Technical Levels

Gold price is downward biased. However, after hitting a YTD low at $1681, the yellow metal stabilized around the $1700-20 area, awaiting a fresh catalyst that could give XAUUSD traders a trend. During the FOMC meeting, gold traders must be aware of the following price levels.

XAUUSD buyers need to focus on the 20-day EMA at $1736.70, the July 8 high at $1752.46, and May 16 low at $1787.03. Contrarily, XAUUSD sellers need to focus on the $1700 figure, followed by the YTD low at $1681 and the 2021 low at $1676.91.