Gold Price Forecast: XAU/USD stuck around $1,920 on a likely hawkish path in Fed Powell’s speech

• XAU/USD is juggling near $1,920 as investors await the roadmap of six rate hikes from Fed’s Powell.
• More focus on price stability has opened doors for a 50 bps interest rate hike.
• Improvement in demand for risk-perceived assets has capped the movement of safe-haven counters.

Gold (XAU/USD) is oscillating in a narrow range of $1,919.64-1,922.20 on Wednesday. The precious metal is delivering limited range moves from the last four trading sessions after the Federal Reserve (Fed) turned aggressively hawkish to tame the galloping inflation.

It is visible from the announcement of six more interest rate hikes by the end of 2022 that the Fed is turning more cautious towards price stability rather than the maximum employment domain now. Well, price stability should be given priority now as a multi-decade high Consumer Price Index (CPI) figure is a casualty in the path of progress. At the last week’s Federal Open Market Committee (FOMC) meeting, the policymakers announced that they are looking to elevate interest rates by 25 basis points (bps) at each of the six FOMC meetings left in 2022. However, the recent comment from the Fed that it will take necessary steps to ensure price stability has opened doors for half of the percent rate hike.

Also, Goldman Sachs stated that they now see “two 50 basis point hikes starting with the next meeting (May and June), followed by four 25 basis point hikes into the end of the year.”

The cues from the opinion polls and authorized agencies pose much importance, however, the real insights over the policy-designing will be provided by the Fed Chair Jerome Powell in his speech on Wednesday.

Meanwhile, the US dollar index (DXY) has turned sideways around 98.50 amid an improvement in the risk appetite of investors. The 10-year US Treasury yields have claimed 2.81% on aggressive tightening stance by the Fed.

Gold Technical Analysis

On an hourly scale, XAU/USD is forming a symmetrical triangle pattern that signals an inventory distribution. Usually, the formation of a symmetrical triangle following a firmer bearish move indicates the continuation of weakness after a volatility expansion. The death cross obtained from 100 and 200-period Exponential Moving Averages (EMAs) adds to the downside filters.

Gold hourly chart