- Gold price climbs to a fresh weekly high on Wednesday, though lacks follow-through.
- A softer US Dollar lends some support to the XAU/USD amid looming recession risks.
- The upside remains capped as traders await the US CPI report and the FOMC minutes.
Gold price scales higher for the second successive day and touches a fresh weekly high, around the $2,021 area on Wednesday, albeit lacks follow-through. The XAU/USD retreats to the $2,010 region during the first half of the European session as traders keenly await the release of the consumer inflation figures from the United States (US) and the Federal Reserve's (Fed) latest policy meeting minutes.
Focus remains on US consumer inflation and FOMC minutes
The crucial US Consumer Price Index (CPI) report will play a key role in influencing market expectations about the next policy move by the Fed. Furthermore, the Fed minutes will provide insight into how policymakers evaluated the need for higher rates despite the turmoil in the banking sector. This, in turn, should help investors to determine the near-term trajectory for the US Dollar (USD) and provide a fresh directional impetus to the non-yielding Gold price.
Recession fears act as a tailwind for Gold price
In the meantime, worries about a deeper global economic downturn, along with heightened US-China tensions over Taiwan, lend some support to the safe-haven XAU/USD. In fact, the International Monetary Fund (IMF) on Tuesday trimmed its 2023 global growth outlook, citing the impact of higher interest rates and fueling recession fears. Furthermore, Minneapolis Fed President Neel Kashkari warned that tightening credit conditions could lead to a recession.
Bets for another 25 bps Fed rate hikes cap the XAU/USD
The upside for the Gold price, however, remains capped amid the prospects for further policy tightening by the Fed. The markets are currently pricing in a greater chance of another 25 basis points (bps) rate hike at the next Federal Open Market Committee (FOMC) meeting in May. The bets were reaffirmed by hawkish comments by Philadelphia Fed Bank President Patrick Harker, saying that the US central bank is fully committed to bringing inflation back down to the 2% target.
Dips could be seen as a buying opportunity
This, for the time being, puts a floor under the US Treasury bond yields, which holds back traders from placing aggressive bearish bets around the USD and contributes to capping gains for the non-yielding Gold price. Nevertheless, the aforementioned fundamental backdrop suggests that the path of least resistance for the XAU/USD is to the upside. Hence, any meaningful corrective pullback is more likely to get bought into and is more likely to remain limited.
Gold price technical outlook
From a technical perspective, the daily swing high, around the $2,020-$2,021 area, now seems to act as an immediate hurdle ahead of the $2,032 region, or over a one-year high touched last week. A sustained strength beyond will be seen as a fresh trigger for bullish traders and allow Gold price to accelerate the momentum towards the $2,048-$2,050 intermediate resistance en route to the all-time high, around the $2,070-$2,075 region.
On the flip side, any meaningful pullback is more likely to find decent support near the $2,000-$1,990 area. A convincing break below should pave the way for a slide towards the $1,955-$1,950 region before the Gold price eventually drops to the next relevant support near the $1,935-$1,934 area. The corrective decline could get extended further towards the $1,918-$1,917 horizontal zone en route to the $1,900 round-figure mark.
Key levels to watch
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks

EUR/USD extends losses to near 1.0900 as Fed decision looms
EUR/USD extends the drop to test 1.0900 in European trading on Wednesday, pressured by a decent US Dollar recovery. Traders resort to position adjustment, lifting the Greenback ahead of the US Federal Reserve interest rate decision.

Gold pauses near all-time peak amid US Dollar recovery, Fed eyed
Gold price struggles to capitalize on the Asian session uptick to the $3.045 area or a fresh all-time peak as bulls pause for a breather and opt to wait for the outcome of a two-day FOMC meeting before placing any directional bets on the bullion.

USD/JPY falls back toward 149.50 after BoJ Ueda's presser
USD/JPY faces rejection at 150.00 and turns lower toward 149.50 in the European session as traders assess BoJ Governor Ueda'a comments. Earlier in the day, the BoJ announced that it left monetary policy settings unchanged, as anticipated. All eyes are now on the Fed outcome.

XRP battles key trendline support as long-term holders continue holding onto large profits
XRP futures open interest has remained largely flat since the market crash in early February. The remittance-based token has shed 33% of its OI between February 1 and March 18, per Coinglass data.

Tariff wars are stories that usually end badly
In a 1933 article on national self-sufficiency1, British economist John Maynard Keynes advised “those who seek to disembarrass a country from its entanglements” to be “very slow and wary” and illustrated his point with the following image: “It should not be a matter of tearing up roots but of slowly training a plant to grow in a different direction”.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.