Gold Price Forecast: XAU/USD approaches $1,650 as risk-off mood moderates, hawkish Fed bets soar

Gold price has rebounded after dropping to near $1,640.00 as the risk-off impulse eases.
A 75 bps rate hike by the Fed looks certain, as the odds have reached almost 100%.
Soaring odds for hawkish Fed have pushed 10-year yields above 4%.

Sagar Dua FXStreet

Gold price (XAU/USD) has sensed a buying interest after dropping to near $1,640.00 in the Tokyo session. The precious metal has witnessed a loss in the downside momentum, and a rebound move has played in, which is approaching $1,650.00.

The rebound move has developed as the risk-off sentiment has been eased for a while as investors have already discounted the expectations of a 75 basis point (bps) rate hike by the Federal Reserve (Fed). The US dollar index (DXY) oscillates around 113.30 after a firmer rebound from 112.20. Also, the 10-year US Treasury yields are above 4% on soaring bets for a hawkish Fed ahead.

Per the CME FedWatch tool, the chances of an increment in the interest rates by 75 bps consecutive for the fourth time stand at 99.4% at the press time. The odds of continuation of a more significant rate have jumped after the release of higher-than-expected US Consumer Price Index (CPI) data released last week. The headline US CPI landed higher at 8.2% than the projections of 8.1% but lower than the prior release of 8.3%. While the core CPI advanced to 6.6% vs the expectations of 6.5%.

Gold technical analysis

The gold price has picked demand after dropping to near the horizontal support plotted from Sep 29 low at $1,641.59. The 20-and 50-Exponential Moving Averages (EMAs) are declining at $1,652.68 and $1,660.00, which adds to the downside filters.

Also, the Relative Strength Index (RSI) (14) oscillates in a bearish range of 20.00-40.00, favouring more weakness ahead.

Gold hourly chart

XAU/USD

Overview
Today last price	1645.08
Today Daily Change	0.00
Today Daily Change %	0.00
Today daily open	1645.08

Trends
Daily SMA20	1671.65
Daily SMA50	1711.2
Daily SMA100	1750.09
Daily SMA200	1818.49

Levels
Previous Daily High	1671.81
Previous Daily Low	1640.23
Previous Weekly High	1699.96
Previous Weekly Low	1640.23
Previous Monthly High	1735.17
Previous Monthly Low	1614.85
Daily Fibonacci 38.2%	1652.29
Daily Fibonacci 61.8%	1659.75
Daily Pivot Point S1	1632.94
Daily Pivot Point S2	1620.79
Daily Pivot Point S3	1601.36
Daily Pivot Point R1	1664.52
Daily Pivot Point R2	1683.95
Daily Pivot Point R3	1696.1

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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