Gold Price Forecast: XAU/USD falls back below $1,920 as Fed remains hawkish on interest rate guidance
|- Gold price has failed to sustain above $1,920.00 amid a hawkish interest rate outlook from the Fed.
- Fed policymakers are in support of more restricting monetary policy as inflation is still stubborn due to robust demand.
- Gold price has faced severe selling pressure while attempting to surpass the 100-period EMA plotted around $1,929.00.
Gold price (XAU/USD) has sensed selling pressure while attempting to sustain above the crucial resistance of $1,920.00 in the European session. The precious metal is struggling to attract bets as Federal Reserve (Fed) policymakers remained hawkish on interest rate outlook, according to Federal Open Market Committee (FOMC) minutes.
Despite deepening worries about the economic outlook due to tight credit conditions, Fed policymakers are in support of more restricting monetary policy as inflation is still stubborn due to robust demand.
S&P500 futures have posted meaningful losses in Europe as investors are cautious ahead of Employment data and quarterly result season. On Thursday, investors will focus on the Automatic Data Processing (ADP) Employment Change report. As per the estimates, the US ADP report will show fresh additions of 228K in June vs. the former addition of 278K.
In addition to the ADP Employment report, US ISM Services PMI will also be on the radar. The economic data is seen higher at 51.0 vs. the former release of 50.3. While New Orders Index is seen declining to 53.3 against the prior release of 56.2.
Meanwhile, the US Dollar Index (DXY) is expected to turn sideways as investors have sidelined ahead of key economic indicators. However, the 10-year US Treasury yields have climbed to 3.97%.
Gold technical analysis
Gold price has faced severe selling pressure while attempting to surpass the 100-period Exponential Moving Average (EMA) plotted around $1,929.00. The precious metal failed to sustain above the downward-sloping trendline plotted from May 03 high at $2,079.76.
The Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00. Bearish momentum would trigger if it drops below 40.00.
Gold four-hour chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.