Gold Price Forecast: XAU/USD establishes above $1,750 as Fed favors termination of bigger rate hike regime

• Gold price has established firmly above $1,750.00 after consolidating around the 200-EMA.
• Markets could turn volatile as United States markets will remain closed on account of Thanksgiving Day.
• The Fed is expected to consider a 50 bps rate hike for December monetary policy meeting.

Gold price (XAU/USD) has shifted its business above the crucial resistance of $1,750.00 in the Tokyo session. The precious metal is expected to extend its gains further as investors are dumping the US dollar index (DXY) amid a significant increment in investors’ risk appetite. The DXY has dropped below the cushion of 106.00 as investors see no scope for the continuation of the 75 basis points (bps) rate hike regime by the Federal Reserve (Fed).

Meanwhile, S&P500 futures are showing further strength after a positive Wednesday. The volatility could decline ahead as markets in the United States will remain closed on Thursday on account of Thanksgiving Day. The 10-year US Treasury yields have extended their losses below 3.69% as the Fed is set to trim its current pace of hiking interest rates.

The Federal Open Market Committee (FOMC) minutes released in the late New York session dictated that the majority of Fed policymakers are favoring a slowdown in the rate hike pace to reduce financial risks and to assess the progress made by policy tightening measures till now. Considering the persistent nature of inflation in the United States economy, Fed chair Jerome Powell will shift to the 50 bps rate hike extent for December’s monetary policy meeting.

Gold technical analysis

On an hourly scale, Gold price has delivered a breakout of the consolidation formed around the 200-period Exponential Moving Average (EMA) at $1,744.00. The consolidation remained in a range of $1,732-1,750.

Adding to that, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates that the upside momentum is active.

Gold hourly chart