Gold Price Forecast: XAU/USD holds $1,850 despite offers as investors await Fed Powell’s speech

• Gold price is holding itself above the critical support of $1,850.00 amid weaker yields.
• The 10-year US Treasury yields have slipped below 3.20% on the bumper rate hike announcement by the Fed.
• Investors await Fed chair Jerome Powell’s speech in today’s session.

Gold price (XAU/USD) is going through a corrective move after a juggernaut rally to a high of $1,857.64, recorded in the early Asian session. The precious metal displayed a perpendicular upside move on Thursday after hitting a low of $1,815.66 as yields plunged. It s worth noting that this time the risk-aversion theme has underpinned the gold prices and other currencies, however, the US dollar index (DXY) and global equities are facing turmoil.

Investors doubt that the Federal Reserve (Fed) will stop the recession arrival, which has trimmed the DXY’s appeal and expectations of lower profits due to recession fears have brought an extreme sell-off in the global equities.  

The 10-year US Treasury yields have plunged by 3.32% to near 3.19% and the ongoing price action is warranting more downside. Vulnerable yields will weaken the DXY further. The DXY is already balancing below 104.00 and is expected to continue its two-day losing streak after slipping below Thursday’s low at 103.42.

In today’s session, the speech from Fed chair Jerome Powell will remain the major event. Investors will get the ideology of the Fed behind a 75 basis point (bps) rate hike announcement. Along with this, guidance for July monetary policy will be of significant importance.

Gold technical analysis

On an hourly scale, gold prices are facing a hurdle around the critical resistance at $1,857.73. A sheer upside move is generally followed by a minor pullback. The precious metal is expected to witness a minor correction towards the 21-period Exponential Moving Average (EMA), which is placed at $1,842.35. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into a bullish range of 60.00-80.00, which underpins a bullish momentum. A minor correction could drag the RSI (14) below 60.00, however, a bullish momentum will remain intact.

Gold hourly chart