The GOLD price has dropped dramatically after failing to reclaim the important resistance level of $1,930.00 during the Asian session. The precious metal has lost its impetus as the US Dollar Index (DXY) begins to recover after sliding to near 101.70.

The USD Index is gathering steam as investors become nervous about the Federal Reserve’s interest rate decision (Fed). The GOLD price fall appears to be light, as Fed Chair Jerome Powell is projected to slow the pace of interest rate hikes even further.

Meanwhile, S&P500 futures have pared some of the gains made on Tuesday, as investors anticipate that further Fed interest rate hikes could exacerbate recession concerns in the United States. US 10-year Treasury rates have fallen below 3.52%.

Aside from the Fed’s monetary policy, the US Automatic Data Processing (ADP) employment figures and the ISM Manufacturing PMI will be crucial. According to estimates, the US economy added 170K additional jobs in January, up from 235K previously. While the manufacturing PMI is predicted to fall to 48.0 from 48.4 previously.

Gold Technical Outlook

Reuters said that the Fed’s decision to raise interest rates would keep the price of GOLD from going up in the future. According to Reuters, GOLD prices are predicted to average $1,852.50 in 2023 and $1,890 in 2024.

The GOLD price rebounded bullishly after touching the bullish channel’s support line, suggesting further gains in the coming trading sessions. If the price goes above $1,928.60, there is a better chance that the rise will continue to $1,950, which is the next positive target. However, to keep the current uptrend going, the price must stay above $1,909.