Gold Price Forecast: XAU/USD continues a subdued performance around $1,920, FOMC minutes eyed

• XAU/USD is auctioning in a narrow range of $1,916.00-1,925.28 amid uncertainty over the FOMC minutes release.
• Gold prices are forming a diamond pattern that signals a bullish reversal after a prolonged consolidation.
• The DXY is approaching 100.00 amid a souring market mood.

Gold (XAU/USD) is displaying a subdued performance on Wednesday after witnessing a steep fall from around $1,945 in the New York session on Tuesday. The precious metal is oscillating in a narrow range of $1,916.00-1,925.28 as investors are waiting for the release of the Federal Open Market Committee (FOMC) minutes, which are due on Wednesday.

The FOMC minutes will unfold the mathematics behind the stance of the Federal Reserve (Fed) Chair Jerome Powell and his colleagues, which was taken for the monetary policy announced in March. This will also provide the status of the US economy. It is worth noting that the Fed increased the interest rate by 25 basis points (bps) in its last monetary policy meet.

On Tuesday, a sheer intraday bearish move in the precious metal was the reflection of the hawkish stance dictated by the Fed policymakers. Fed Governor Lael Brainard cited that the Fed is ready for aggressive action if the indicators of inflation and inflation expectations get worsen. Also, the balance sheet reduction program will pick up soon, which will de-escalate the helicopter money from the economy.

Meanwhile, the US dollar index (DXY) is aiming to kiss the psychological figure of 100.00 amid souring market sentiments on hawkish stances from the Fed officials. Also, the 10-year US Treasury yields have printed a fresh three-year high at 2.62%.

Gold Technical Analysis

On an hourly scale, XAU/USD is auctioning in a diamond pattern that signals a bullish reversal after a prolonged consolidation. The formation indicates inventory adjustment in which the inventory is shifted from retail participants to institutional investors. The chart pattern is plotted in a wider range of $1,890.21-1,965.79. The Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which signals a consolidation ahead.

Gold hourly chart