Gold Price Forecast: XAU/USD fall as US yields tick higher after Powell’s words

• Jerome Powell sounded cautious with a hawkish tilt, leaving the door open for another hike in 2023.
• Markets are price back chances of a hike in November.
• Higher US yields opened the downside to the yellow metal.

On Friday, the Gold Spot price XAU/USD faced selling pressure after Jerome Powell’s words at the Jackson Hole Symposium. The spot trades near the $1,910 area, where the 20 and 200-day Simple Moving Average (SMA) are about to perform a bearish cross.

Chair Powell stated that the Federal Reserve (Fed) needs to be cautious regarding the next meetings. He commented that the economy hasn’t cooled down as expected and that the bank will maintain its restrictive policy until it shows signs of cooling down. As he pointed out in July, it will all come down to the incoming data. The Fed will get an additional Nonfarm Payrolls and inflation report from August, and those data points will help investors model their expectations.

Reacting to the speech, US yields, which tend to be negatively correlated with non-yielding metal prices, rose with the 2-year rate leading towards 5.06%, seeing more than 0.80% gains. In line with that, the odds of a 25 basis point (bps) hike in November, according to the CME FedWatch tool, rose to 44%.

XAU/USD Levels to watch

The technical analysis of the daily chart points to a neutral to a bearish outlook for XAU/USD, indicating a decline in the recent bullish strength. The Relative Strength Index (RSI) exhibits a negative slope below its midline, while the Moving Average Convergence (MACD) prints flat green bars.

Support levels: $1,900, $1,880, $1,850

Resistance levels: $1,915 (bearish cross between the 20 and 200-day SMA), $1,930, $1,950

XAU/USD Daily chart