The GOLD price (XAU/USD) is currently in a consolidation phase after experiencing the strongest rally in five weeks. Despite this, the precious metal has yet to surpass key resistance levels, which, coupled with concerns over the Federal Reserve’s actions, is influencing gold buyers.

The recent surge in the price of GOLD was driven by a weakened US Dollar, following discouraging employment and activity data. Additionally, optimism surrounding China’s economic outlook provided further support. However, disappointing inflation figures from China and a reassessment of dovish concerns about the Federal Reserve have impacted Gold buyers.

Looking ahead, while the Federal Reserve is expected to maintain rates in June, surprises from the Reserve Bank of Australia and the Bank of Canada, which leaned towards a hawkish stance, present challenges for Gold buyers. Even if the Federal Open Market Committee refrains from a rate hike, Gold prices could decline if policymakers strongly indicate a rate hike in July or later.

Key levels to watch for the GOLD price include the $1,960 support level, which comprises the 200-hour moving average and the 38.2% Fibonacci level on the daily chart. If the price remains above this level, there is potential for a rally towards the $1,966 level, where the Fibonacci 38.2% on the one-week and 23.6% on the one-day converge. The middle band of the Bollinger on the daily chart, around $1,969, acts as an immediate upside barrier.

However, if the GOLD price breaks below the $1,960 support, it may experience further downside towards the 100-day moving average at around $1,941. Additionally, the 5-day moving average near $1,955 could provide additional resistance for sellers.