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Gold Price Forecast: XAU/USD bears brace for Feds rate hike around $1,660

  • Gold price remains pressured around yearly low inside immediate trading range.
  • Risk-aversion amplifies as markets approach multiple central bank decision.
  • Firmer yields, downbeat stocks underpin USDs safe-haven demand and weigh on XAU/USD price.
  • Chatters over Feds 1.0% rate hike, geopolitical woes constitute sour sentiment.

Gold price (XAU/USD) portrays the pre-Fed anxiety as bears flirt with $1,665 in a immediate trading range during Wednesdays Asian session. Having said that, the hawkish Fed bets join geopolitical fears to exert downside strain on the metal. However, the markets consolidation prior to the key central bank announcements appears to probe the bears, along with the already priced 0.75% Fed rate hike.

The Fed started a two-day meeting on Tuesday, with rate futures traders pricing within an 83% potential for a 75 basis-point hike and a 17% possibility of a 100 bps of tightening, said Reuters. The news headlines joins increasing demands a confident surprise to weigh on the XAU/USD price. The global economist Nouriel Roubini joined the league of supporters for the Feds 1.0% rate hike and favored the metal bears the prior day.

Also, news of simple lockdown in the steel hub of Tangshan, because of Chinas zero covid policy, recently challenged the market sentiment and strengthened the united states dollars safe-haven demand. On a single line may be the news suggesting US Senators demand for secondary sanctions on Russian oil.

Furthermore, the Asian Development Bank (ADB) on Wednesday cut its growth forecasts for developing Asia for 2022 and 2023 amid mounting risks from increased central bank monetary tightening, the fallout from the war in Ukraine and COVID-19 lockdowns in China, reported Reuters. The news headlines exerts downside strain on the sentiment and the XAU/USD.

Discussing the united states data, mostly upbeat US housing data appeared to have propelled the yields to favor DXY bulls. The nine-month downtrend in america NAHB HOUSING MARKETPLACE Index precedes the Building Permits to at least one 1.517M in August versus 1.61M forecast and 1.685M prior. However, Housing Starts improved to at least one 1.575M in comparison to 1.445M market consensus and 1.404M previous readings.

Amid these plays, the united states 2-year Treasury yields jumped to the best level in 15 years as the 10-year counterpart also rose to the 11-year top through the pre-Fed cautious mood. With this particular, the Wall Street benchmarks closed in debt as the S&P 500 Futures remain indecisive at the most recent.

As the markets indecision is mainly from the pre-Fed anxiety, several other central banks may also be on the calendar to go the markets and gold prices. However, the eye will be on what every one of them have the ability to avoid recession but still make an effort to tame inflation. If the Fed convinces optimists of these capacity, the chances of an XAU/USD rebound cant be ruled.

Technical analysis

Gold price holds captive in the one-week-old $20 trading range as traders brace for the Fed. However, the yellow metals latest U-turn from the 100-HMA joins bearish MACD signals and downbeat RSI (14) to suggest the sellers dominance.

Having said that, the stated ranges bottom, surrounding $1,660, defends the intraday buyers before directing XAU/USD towards refreshing the yearly low, currently around $1,654.

If so, the 61.8% and 78.6% Fibonacci Expansion (FE) degrees of September 14-16 moves, near $1,647 and $1,638 respectively, could lure the gold bears.

Alternatively, the 100-HMA restricts immediate upside near $1,672 prior to the aforementioned ranges top, near $1,680.

Its worth noting that the XAU/USD run-up beyond $1,680 needs validation from September 14 peak surrounding $1,710 to convince buyers.

Gold: Hourly chart

Trend: Further weakness expected

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