Gold Price Forecast: XAU/USD drops below $1,830 as uncertainty over Fed Powell’s testimony soars

• Gold prices have extended their losses after slipping below the cushion of $1,830.00.
• Fed Powell’s testimony is expected to be extremely hawkish considering the runaway inflation rate.
• The EU is supposed to ban gold trading from Russia.

Gold price (XAU/USD) has extended its losses in the Asian session after violating the critical support of $1,830.00.  The precious metal was declining gradually earlier as investors were on the sidelines ahead of Federal Reserve (Fed) chair Jerome Powell’s testimony. Now, a decisive move below $1,830.00 has infused an adrenaline rush into the gold bears, which may drag the gold prices significantly lower.

Investors are hoping that Fed Powell is going to dictate an extremely hawkish stance on July monetary policy. The Fed has already elevated its interest rates to 1.50-1.75% in the last four months, however, the impact on the inflation mess is still not visible. This has supported the US dollar index (DXY), which is attempting to sustain above Tuesday’s high at 104.60.

On the global front, European Union (EU) Leaders Summit could ban imports or exports of gold or both from Russia after banning oil imports, as per Reuters. If that occurs, it may bring more uncertainty to the gold prices.

The monetary policy plans from various central banks are indicating hawkish guidance for the upcoming policies, which will keep the gold bulls on the tenterhooks.

Gold technical analysis

On an hourly scale, gold prices have displayed a downside break of the Descending Triangle, whose horizontal support is placed from $1,834.39 while the downward sloping trendline is plotted from Thursday’s high at $1,857.04. The 50-period Exponential Moving Average (EMA) at $1,835.74 is declining, which adds to the downside filters. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into a bearish range of 20.00-40.00, which signals more downside ahead.

Gold hourly chart