Gold Price Forecast: XAU/USD seems out of the woods, likely to pass $1,950 despite hawkish Fed

• The gold price has moved higher on hawkish Fed policymakers.
• EU leaders summit and Biden meeting with its NATO counterparts will remain in focus.
• Gold bulls are firmer above 21 EMA.

Gold (XAU/USD) was juggling in a narrow range of $1,911.10-1,941.56 since the last week but now seems to come out of the woods and rally further despite headwinds of hawkish stance from the Federal Reserve (Fed)’s policymakers.

The precious metal seems underpinned by the market participants despite the rising odds of a 50 basis point (bps) interest rate hike by the Fed. San Francisco Fed Bank President Mary Daly in her speech on Wednesday claimed that interest rates may settle around 2.5%, which will be required to corner the soaring inflation while Cleveland Fed Bank President Loretta Mester favored 50 bps interest rate hikes by the Fed more than once by the end of 2022. It looks like the aggressive tightening stance from the Fed members has failed to tighten the gold prices.

The US dollar index (DXY) has been stuck near 98.50 and awaits a fresh wave in the risk-aversion theme for attracting bids. Meanwhile, the 10-year US Treasury yields have sensed minor weakness from its fresh two-year high at 2.42%.

Going forward, the economic calendar is full of mega-events on Thursday. US docket will reveal Initial Jobless Claims, Durable Goods Orders, and Market (Manufacturing and Services) PMI on Thursday. However, the spotlight will remain on the EU leaders summit to discuss the embargo on Russian oil and US President Joe Biden meeting with his NATO counterparts to discuss the Russia-Ukraine tensions and approach for a diplomatic solution.

Gold Technical Analysis

XAU/USD has given a breakout of the falling channel, which has sent the gold prices near $1,945. The upper end of the falling channel is placed from March 17 high at $1,949.80 while the lower end is marked from March 18 low at $1,918.21. The Relative Strength Index (RSI) (14) is oscillating in a range of 60.00-80.00, which signals for the continuation of a bullish trend. The 21-period Exponential Moving Average (EMA) at $1,937.15 will act as major support for the counter.

Gold hourly chart