Gold Price Forecast: XAU/USD holds steady above $1,650 ahead of the key Fed decision

• Gold edges higher for the second straight day amid modest USD weakness.
• Hopes for a less hawkish Fed continue to exert pressure on the greenback.
• The upbeat US ADP report fails to impress the USD bulls or provide impetus.
• The market focus remains on the crucial FOMC monetary policy decision.

Gold gains some positive traction for the second successive day on Wednesday and maintains its bid tone through the early North American session. The XAU/USD is currently placed near the top end of its daily range, just above the $1,655 level, as traders keenly await the highly-anticipated FOMC monetary policy decision.

In the meantime, expectations for a less hawkish Fed prompt fresh US dollar selling, which, in turn, is seen offering some support to the dollar-denominated gold. Market participants expect that the US central bank might slow the pace of its rate-hiking cycle amid the deteriorating outlook for the US economy. Even the upbeat ADP report, showing that private-sector employers added 239K jobs in October against 193K expected, fails to boot the USD.

Despite the supporting factor, the XAU/USD lacks bullish conviction ahead of the crucial central bank event risk. The Fed will announce its policy decision later during the US session and is expected to deliver another supersized 75 bps rate hike for the fourth time in as many meetings. The market focus, however, will remain glued to the accompanying monetary policy statement and Fed Chair Jerome Powell's comments at the post-meeting press conference.

Investors will look for fresh clues about the pace of future policy tightening by the Fed, which will play a key role in influencing the USD price dynamics. This, in turn, will help determine the next leg of a directional move for the non-yielding gold. The current market pricing indicates over a 50% chance of a 50 bps Fed rate hike move in December. A more hawkish signal will set the stage for the resumption of the recent bearish trend for the XAU/USD.

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Gold Price Forecast: XAU/USD to meltdown below the $1,675 mark – TDS

With every downtick, the risk of capitulation in gold is rising. Economists at TD Securities expect the yellow metal to slump below the $1,675 level.

China's appetite for gold has remained resilient

“The top players in Shanghai markets continue to add to their gold length, despite a depreciating CNY. These flows, alongside central bank demand, have likely kept gold from melting in a liquidity vacuum amid a hawkish Fed narrative, Nonetheless, the risk of capitulation from bloated prop-shop positioning is growing with every tick lower in prices as we approach this cohort's pandemic-era entry levels.”

“The downtrend in gold is gaining steam, as the breadth of technical signals short continues to firm.”

“The risk of a breakout in the broad dollar index could coincide with a meltdown below the $1,675 range in gold.”

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Gold Price Forecast: XAUUSD surrenders intraday gains amid modest USD strength

Gold price struggles to preserve its modest intraday gains amid the emergence of some USD buying.

The prospects for a more aggressive major central banks also acted as a headwind for the metal.

The downside seems limited ahead of this week’s key US macro releases and the FOMC decision.

Gold price attracted some selling near the $1,728 region on Tuesday and retreated to the lower end of its daily range during the first half of the European session. The XAUUSD was last seen trading just below the $1,720 level, nearly unchanged for the day.

The US dollar staged a goodish rebound from the vicinity of its lowest level since July 5 touched the previous day, which, in turn, acted as a headwind for the dollar-denominated gold. This, along with the prospects for a more aggressive move by major central banks to curb soaring inflation, was seen as another factor weighing on the non-yielding yellow metal.

Gold price struggles to preserve its modest intraday gains amid the emergence of some USD buying.

The prospects for a more aggressive major central banks also acted as a headwind for the metal.

The downside seems limited ahead of this week’s key US macro releases and the FOMC decision.

Gold price attracted some selling near the $1,728 region on Tuesday and retreated to the lower end of its daily range during the first half of the European session. The XAUUSD was last seen trading just below the $1,720 level, nearly unchanged for the day.

The US dollar staged a goodish rebound from the vicinity of its lowest level since July 5 touched the previous day, which, in turn, acted as a headwind for the dollar-denominated gold. This, along with the prospects for a more aggressive move by major central banks to curb soaring inflation, was seen as another factor weighing on the non-yielding yellow metal.

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Gold Price manages to hold above key support, awaits next catalyst

Gold Price is fluctuating in a tight range near $1,850 on Monday.

10-year US T-bond yield stays flat following last week's rally.

Strong near-term support seems to have formed at $1,840.

Gold Price moves sideways near $1,850 at the start of the week following the sharp drop witnessed on Friday. Trading conditions remain thin due to the Whit Monday holiday in Europe. The US economic docket will not be offering any high-impact data releases and XAUUSD is likely to continue to fluctuate between key technical levels.

Rising US yields limit gold's upside

The US Bureau of Labor Statistics announced on Friday that Nonfarm Payrolls in the US rose by 390,000 in May, surpassing the market expectation for an increase of 325,000. Further details of the report showed that the Labor Force Participation Rate improved modestly to 62.3% and the annual wage inflation edged lower to 5.2% as expected. The US Treasury bond yields shot higher on the upbeat US jobs report and forced gold to erase its weekly gains. The benchmark 10-year yield rose more than 7% last week and snapped a three-week losing streak. At the time of press, the 10-year yield was moving up and down in a narrow channel near 2.95%.

Gold Price could react to ECB, US inflation data

Later in the week, the European Central Bank (ECB) is widely expected to keep policy rates unchanged. The bank is set to hike its policy rate by 25 basis points in July with the Asset Purchase Programme (APP) coming to an end in July. According to Bloomberg, some policymakers want ECB President Christine Lagarde to deliver a convincing message that borrowing costs of vulnerable countries will be contained and fragmentation will not be allowed. A strong reaction in XAUEUR to ECB's policy announcements could impact XAUUSD's movements in the second half of the week.

The most important data release of the week will be the May inflation report from the US on Friday. The Consumer Price Index (CPI) and the Core CPI are forecast to decline to 8.2% and 5.9%, respectively, on a yearly basis. With the NFP data confirming that labor market conditions remain tight in the US, stronger-than-expected CPI figures are likely to trigger another leg higher in US yields and make it difficult for gold to find demand. On the other hand, a retreat in consumer inflation could cause investors to start pricing in a pause in Fed rate hikes in September and help XAUUSD push higher.

Ahead of the above-mentioned key events, XAUUSD could have a hard time making a decisive move in either direction. The market mood seems to have turned upbeat at the beginning of the week. In case risk flows continue to dominate the markets, the dollar could lose interest and help gold hold its ground. In that scenario, however, US yields could gain traction and not allow gold to turn north.

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Gold Price Analysis: XAU/USD benefits from softening buck, lower US yields, eyes test of 200-DMA

Gold is higher amid risk-off flows, a weaker buck and lower US yields.

XAU/USD is eyeing a test of its 200-DMA around $1,837 once again.

Spot gold (XAU/USD) prices are trading around $1,830 per troy ounce and once again eyeing a test of the 200-Day Moving Average around $1,837, having gained around $15 (or around 0.8%) thus far on the session. Risk-off flows in the global equity space have continued on Thursday after Wall Street’s worst day in nearly two years on Wednesday as investors continue to fret about softening global growth expectations at a time when major central banks (namely the Fed and to a lesser extent the BoE and ECB) appear intent on aggressive monetary tightening.

That is a toxic combination for equities and investors have begun seeking out safety in traditional safe-haven assets such as US bonds, even though US bond valuations have been hit hard in recent months by the hawkish shift in the Fed’s stance. Either way, on Thursday US yields (nominal and real) are lower and this is dampening the appeal of the US dollar as a safe-haven currency, with the likes of the Swiss franc and yen performing better.

The combination of lower yields, which reduces the “opportunity cost” of holding non-yielding gold, and a weaker US dollar, which reduces the price of USD-denominated commodities like XAU/USD for foreign buyers, is having the dual effect of supporting gold on Thursday. But whether these trends will continue, and whether XAU/USD will be able to break above its 200-DMA and out of its recent bearish trend, remains to be seen.

In recent weeks, buying USD dips and selling gold rallies has been a highly profitable strategy. As long as markets continue to believe that the Fed will follow through with as much monetary tightening as it has been promising, gold’s chances of rebounding back to the, say, upper-$1,800s look limited. Looking to the immediate future, a few tier two US data releases on Thursday in the form of the May Philadelphia Manufacturing survey, the weekly initial jobless claims report and April Existing Home Sales probably won’t move markets much. But the data will likely keep focus on the overarching themes of slowing growth, inflation and central bank tightening.

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Gold Price Forecast: XAUUSD slides further below $1,800, lowest since late January

Gold attracted fresh selling on Monday and dived to its lowest level since late January.

Signs of stability in the financial markets undermined demand for the safe-haven metal.

Break below the $1,800 accelerated the slide and has paved the way for further losses.

Gold weakened further below the $1,800 mark and dropped to its lowest level since late January during the first half of the European session. Spot prices

Following an early uptick to the $1,818 region, the XAUUSD came under some renewed selling pressure on Monday and prolonged its recent bearish trajectory witnessed over the past one month or so. Modest recovery in the global risk sentiment - as depicted by signs of stability in the equity markets - turned out to be a key factor that undermined the safe-haven gold.

Apart from this, the prospects for a more aggressive policy tightening by the Fed further contributed to driving flows away from the non-yielding yellow metal. The intraday downfall took along some short-term trading stops placed near the $1,800 mark. This further aggravated the bearish pressure surrounding gold, though a combination of factors helped limit losses.

Mounting global growth concern resulting from the war in Ukraine and China's zero-COVID-19 policy has spurred a rally in bonds, which saw the benchmark 10-year yields retreat from the recent peak of 3.20%. This, in turn, kept the US dollar bulls on the defensive and extended some support to the dollar-denominated commodity, allowing spot prices to rebound from the $1,787-$1,785 area.

That said, the lack of any strong follow-through buying and acceptance below the $1,800 round figure marks a bearish breakdown. Hence, a subsequent slide towards the $1,782-$1,780 area, or the 2022 low, en-route the next relevant support near the $1,753-$1,751 zone, remains a distinct possibility. Traders now look forward to the US Empire State Manufacturing Index for a fresh impetus.

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Gold Price Forecast: XAU/USD extends losses towards $1,850 as USD rises with yields

Gold Price gets hammered amid ‘sell everything’ mode amid risk-aversion.

Flight to safety, US dollar dominate while Treasury yields keep rallying.

XAU/USD remains poised to test the $1,850 barrier, awaits US inflation.

Gold Price is tumbling alongside the US government bonds and global stocks, as investors seek refuge in only the US dollar, with risk-aversion at full steam at the start of the fresh week.

After a turbulent last week, dominated by the central banks, global growth fears are back to the fore amid extended Chinese covid curbs and fears over interest rate hikes. In times of market panic and uncertainty, the dollar remains in cruise control, courtesy of its appeal as an ultimate safe haven.

The buck also finds demand as the Fed remains ahead of the curve when compared to all the other major central banks worldwide. Despite a less hawkish stance last Wednesday, the Fed remains on track for 50 bps rate hikes at the next two meetings while beginning the balance sheet reduction process.

A stronger dollar weighs heavily on the USD-price Gold while the rally in the Treasury yields exacerbates the pain in the non-yielding yellow metal. The benchmark 10-year US rates are currently trading at 3.185%, the highest level since November 2018, on Fed rate hike bets.

Adding to the downside in Gold Price, the speculative net shorts on the metal have grown last week, as investors flock to the dollar instead ahead of the all-important US inflation data due later this Thursday.

Looking ahead, Gold Price will remain at mercy of the sentiment around the yields and the dollar. Any rebound in Wall Street stocks could pause the dollar upsurge, offering some reprieve to gold bulls.

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XAU/USD at weekly high, bulls awaiting sustained move beyond $1,900

Gold gained traction for the third straight day and climbed to a fresh weekly high on Thursday.

A less hawkish Fed extended support to the metal amid the latest COVID-19 outbreak in China.

The prospects for a further tightening by the Fed revived the USD demand and capped gains.

Gold built on this week's goodish rebound from the $1,850 area, scaling higher for the third successive day on Thursday. The momentum pushed spot prices to a fresh weekly high during the early European session, though bulls struggled to capitalize on the move further beyond the $1,900 round-figure mark.

On Wednesday the Fed increased the Fed Funds rate by 50 bps in the the largest rate hike since 2000, and the beginning of quantitative tightening (QT) – but it downplayed the possibility of further super-size hikes. In the post-meeting press conference, Powell eased market fears about a more aggressive tightening path and said that the Fed was not actively considering a 75 bps rate hike in June. This, in turn, was seen as a key factor that offered some support to the non-yielding yellow metal. Apart from this, concerns about the potential economic fallout from rising COVID-19 cases and strict lockdowns in China benefitted the safe-haven gold.

That said, the markets are still pricing in a further 200 bps rate hike for the rest of 2022, which was evident from a fresh leg up in the US Treasury bond yields. This, in turn, helped revive the US dollar demand and acted as a headwind for the dollar-denominated commodity. This makes it prudent to wait for strong follow-through buying before confirming that gold has bottomed out near the $1,850 region and is positioning for a more robust near-term appreciating move.

Market participants now look forward to the US economic docket, featuring the release of Weekly Initial Jobless Claims later during the early North American session. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to gold. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities. 

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Gold Price Forecast: Battle lines well-mapped for XAUUSD ahead of key event risks – Confluence Detector

Gold Price consolidates the rebound, not out of the woods yet.

Markets remain risk-averse amid Beijing lockdown fears, Fed rate hikes.

US dollar index closes in on 102.00, holds near two-year highs.

Nothing much has changed fundamentally for Gold Price over the past 24 hours, although bulls are seeing some temporary reprieve. The bearish potential remains intact for XAUUSD, as the US dollar holds near two-year highs vs. its main rivals. Markets remain cautious and prefer to seek refuge in the US currency amid rising worries over the Fed’s aggressive tightening stance and Beijing's covid lockdown, which may temper the global economic recovery. Traders now await the US economic releases for fresh dollar valuations, eventually impacting Gold Price.

Gold Price: Key levels to watch

The Technical Confluences Detector shows that Gold Price is stuck in a narrow range despite the rebound, as the pivot point one-week S1 at $1,906 limits the immediate upside.

If that level is scaled, then bulls need to yield a decisive break above $1,909, the confluence of the Fibonacci 38.2% one-day and the previous high four-hour.

The next stop for XAUUSD bulls is envisioned at the SMA10 four-hour at $1,911. Further up, the convergence of the Fibonacci 61.8% one-day and SMA200 15-minutes at $1,918 will be eyed. 

On the downside, $1,900 acts as powerful support, where the Bollinger Band one-day Lower lies.

Should bears take out that downside cap, then a retest of the daily lows at $1,896 will be inevitable.

The previous day’s low of $1,892 will be next on the sellers’ radars. The line in the sand for Gold buyers is the previous month’s low at $1,890.

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 Gold Price Forecast: $1,960 could cap XAU/USD ahead of US CPI

Gold struggled to capitalize on its early uptick and attracted some selling around the $1,960 region on Tuesday. The pullback extended through the first half of the European session and dragged spot gold further away from the four-week high touched the previous day. The prospects for a faster policy tightening by the Fed pushed the US Treasury bond yields to a fresh multi-year peak and acted as a headwind for the non-yielding yellow metal. That said, concerns that the war in Ukraine and tough new COVID-19 restrictions in China could hit global growth could limit losses for the safe-haven XAU/USD. Apart from this, worries that the recent surge in commodity prices would put upward pressure on already high consumer prices could further benefit the metal's appeal as a hedge against inflation. Hence, the market focus will remain on the US CPI report, scheduled for release later during the early North American session.

Gold: Key levels to watch

The Technical Confluences Detector shows that any subsequent slide is likely to attract some buying near the $1,952-51 region - the Fibonacci 61.8% one day. The next relevant support is pegged near the $1,941 area - the Fibonacci 23.6% one week - ahead of the $1,937 zone, marking the 5-day SMA. A convincing break below could negate prospects for any further near-term appreciating move and drag spot gold to the $1,921-$1,919 intermediate support en-route the $1,900 round-figure mark.

On the flip side, the $1,960 region now seems to have emerged as an immediate strong barrier. The said resistance is the convergence of the Fibonacci 38.2% one day, Pivot Point one week R1, Bollinger Band one-day Upper and the Fibonacci 61.8% one month. Sustained strength beyond would be seen as a fresh trigger for bullish traders and pave the way for a move back towards the $2,000 psychological mark.

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 Gold heads for best quarter in six on Russia-Ukraine war

Gold was on course to post its biggest quarterly gain since September 2020 as the safe-haven metal's appeal was lifted by the Russia-Ukraine conflict and concerns over sky-high inflation.

However, by 0938 GMT, spot gold XAU= slipped 0.5% to $1,93.40 per ounce and U.S. gold futures GCv1 fell 0.6% to $1,927.80 as oil prices fell.

Oil plunged on news that the United States was considering releasing a large quantity of its Strategic Petroleum Reserve to tackle high fuel prices.

"This (lower oil prices) has somewhat allayed the inflation concerns of market participants, meaning that gold as a store of value appears to be in less demand initially today," Commerzbank (DE:CBKG) said in a note.

Bullion has gained about 5.2% this quarter as a Russia's invasion of Ukraine in late February drove gold to a near record high earlier this month. (Full Story)

Along with the Ukraine crisis, worries over high inflation and whether efforts by major central banks are enough to rein it in are weighing on the economy and helping gold do well, said Brian Lan, managing director at dealer GoldSilver Central.

Meanwhile, European stocks were set for the biggest quarterly drop since the start of 2020. MKTS/GLOB

Non-yielding bullion is considered a safe store of value during uncertain times and a hedge against inflation.

Gold also remains en route to post a monthly rise, despite falling earlier in the month ahead of the U.S. Federal Reserve's decision to hike borrowing costs for the first time in three years to tame inflation. (Full Story)

Silver XAG= dipped 0.6% to $24.69 per ounce. Platinum XPT= slipped 0.7% to $983.27. Still, they were set to record quarterly gains.

Auto-catalyst metal palladium XPD= slipped 1.3% to $2,235.77, but is set for its sharpest quarterly jump since September 2020, having hit record highs earlier this month after the West heaped sanctions on top-producer Russia.

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