The gold price has lost some luster during the Asian session, falling 0.2% at the time of writing. The yellow metal is currently trading at $1,755.08 and has been trading in a tight range between $1,754.94 and $1,758.80 on the day, indicating a bearish technical outlook. Fed officials’ hawkish views ahead of Federal Reserve chairman Powell’s Jackson Hole speech further knocked on market demand for the precious metal XAU/USD.

The US dollar rose against a basket of currencies on Friday, but not quite a 20-year high, as investors awaited the Federal Reserve chairman’s address at 10 a.m. ET for further hints on how active the central bank will be in its fight against inflation.

Following a slew of fewer inflationary data this week, traders have lowered their most hawkish expectations. Still, the sentiment remains that the Fed will remain firm in its determination to combat inflation, which remains at 8.5% annually, well above the Fed’s 2% target.

As a result, Jerome Powell’s speech at Jackson Hole will be studied for any indication that an economic slowdown may change the Fed’s plan. Fed funds futures traders are pricing in a 61% possibility of another 75 basis point boost at the Fed’s September meeting and a 39% chance of a 50 basis point increase.

The US dollar index DXY was up 0.11% at 108.53, slightly below a 20-year high of 109.29 sets on July 14. If Powell expresses any reservations about the impact of monetary tightening, the strong dollar may give back some of its gains on Friday, supporting gold prices higher.

Looking ahead, movements in the US dollar, US real rates, and central bank policy will continue to drive the XAU/USD price for the rest of this year and into 2023. “We foresee slightly lower gold prices for the rest of the year,” said ABM Amro analysts.

“We continue to expect the Fed to raise the fed funds rate to 4% by early 2023, with the risk that part of that tightening would be frontloaded.” This is slightly higher than the market consensus. This should have an impact on gold prices. We also anticipate that the US dollar will remain reasonably robust. However, we expect gold prices to fall slightly below their current levels.”

Gold Technical Outlook

Gold extended its gains and surpassed the 1755 resistance, sending the yellow metal towards the next resistance at 1770, assuming it remains above 1745. Gold gained momentum, reaching the first price goal of 1760 and heading for the second, 1770 if it remains above 1750.

Today’s trading range is expected to be between the 1750 support and the 1760 resistance.

Today’s expected trend: bullish