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Gold Price Forecast: Hawkish Federal Reserve Concerns Could Send XAU/USD Prices Lower In The Short-Term

Following a three-day rally, the GOLD price (XAU/USD) struggled to extend week-start recovery advances, making rounds to $1,875 during Thursday’s Asian session. The lack of buying interest in GOLD could be attributed to hawkish Federal Reserve (Fed) pronouncements, as well as statements from US diplomats underlining inflation risks.

However, the easing of US-China ties and a light calendar test the XAU/USD bearish, while technical analysis teases the GOLD selling.

Following encouraging US job and activity data, Federal Reserve (Fed) officials, notably Chairman Jerome Powell, rekindled inflation fears, allowing the US Dollar Index (DXY) to regain upside momentum after a week-long decline from the monthly peak. This is in addition to a lack of big positives from other sources to test the GOLD price’s upside.

However, Fed Governor Christopher Waller hinted at a long battle with a 2.0% inflation target by stating the prospects of tighter monetary policy for longer than envisaged. New York Federal Reserve President John Williams said the job market is still extremely robust and that they have more work to do on rates, adding that data will determine the course of rate hikes. Fed Governor Lisa Cook stated that the central bank is still engaged in restoring stable prices because inflation is too high. She went on to say that they would need a strict monetary policy for a while.

Gold Technical Outlook

GOLD price is hovering at $1,878.80 and continues to vary within the bearish flag pattern, waiting for a break of $1,868 to activate the negative effect of this pattern, followed by a rise to the primary expected negative goal of $1,828.70. As a result, the bearish trend scenario will stay true for the foreseeable future. The negative pressure from the EMA50 will support this, and a break of 1885.75 will stop the predicted drop and cause the price to go up. Today’s trading range is likely between 1860.00 support and 1892.00 resistance.
Today’s projected trend is bearish.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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