Gold Price Forecast: XAU/USD awaits a pullback near $1,930 on a minor rebound in DXY

• Gold prices look for a corrective pullback near $1,929.37 on softer DXY.
• The expectation of a ceasefire is losing steam after Russia remarked peace-talks progress ‘wrong’.
• Bulls attack 200-EMA after surpassing 20-EMA decisively.

Gold (XAU/USD) witnessed a juggernaut upside move from the recent lows of $1,895.15 on Wednesday. The precious metal bounced sharply after the Federal Reserve (Fed) dictated the interest rate decision on Wednesday. Investors gung-ho for the gold after the Fed announced an interest rate hike by 25 basis points (bps).

Usually, an interest rate hike by the Fed results in weak gold prices but a 25 bps interest rate hike was already announced by Fed Chair Jerome Powell in his March's testimony. Therefore, investors found activation of the ‘buy on the rumor and sell on news’ indicator and pressed the buy button for gold. The street was expecting an interest rate hike by 50 bps. Should this occur the precious metal might go through intensified selling pressure.

Apart from the Fed’s monetary policy, renewed fears of ceasefire delay between Russia and Ukraine have underpinned the gold prices. The Kremlin reportedly said that news pointing to progress in Ukraine-Russia peace talks was “wrong,” as per Reuters. The statement from Moscow has raised questions over the credibility of progressing peace-talks headlines from the Ukraine officials. Earlier, Ukraine announced that the nations are inching towards a tentative 15-point peace plan, which inculcates a ceasefire clause, swiftly. The headline brought optimism to the market but considering the response from Moscow, the optimism may fade away and risk-sensitive assets will face the heat of souring sentiment again.

Meanwhile, the DXY has witnessed a pullback near 98.00 after plunging around 1.5% from Monday’s high at 99.30.

Gold Technical Analysis

On an hourly chart, XAU/USD has attacked the 200-period Exponential Moving Average (EMA) at $1,950.00 after overstepping the 20-period EMA at $1,918.50 decisively. The Relative Strength Index (RSI) (14) has shifted in a bullish range of 60.00-80.00 after sensing barricades near 60.00 multiple times. After entering in a bullish range, a pullback seems likely towards 40.00 and eventually, the gold prices will also fall near Wednesday’s high at $1,929.37.

Gold hourly chart